The Overlooked Surprises of Apple’s WWDC Keynote

For some, Apple’s WWDC keynote event went liked they hoped, with the company introducing some exciting new products or technologies that hit all the sweet spots in today’s dramatically reshaped tech environment. Augmented reality (AR), artificial intelligence, smart speakers, digital assistants, convolutional neural networks, machine learning and computer vision were all mentioned in some way, shape or form during the address.

For others, the event went like they expected, with Apple delivering on virtually all the big rumors they were “supposed” to meet: updated Macs and iPads, a platform for building AR apps on iOS devices, and a Siri-driven smart speaker.

For me, the event was a satisfying affirmation that the company has not fallen behind its many competitors, and is working on products and platforms that take advantage of the most interesting and potentially exciting new technologies across hardware, software and services that we’ve seen for some time. In addition, they laid the groundwork for ongoing advancements in overall contextual intelligence, which will likely be a critical distinction across digital assistants for some time to come.

Part of the reason for my viewpoint is that there were several interesting, though perhaps a bit subtle, surprises sprinkled throughout the event. Some of the biggest were around Siri, which a few people pointed out didn’t really get much direct attention and focus in the presentation.

However, Apple described several enhancements to Siri that are intended to make it more aware of where you are, what you’re doing, and knowing what things you care about. Most importantly, a lot of this AI- or machine learning-based work is going to happen directly on iOS devices. Just last year, Apple caught grief for talking about differential privacy and the ability to do machine learning on an iPhone because the general thinking then was that you could only do that kind of work by collecting massive amounts of data and performing analysis in large data centers.

Now, a year later, the thinking around device-based AI has done a 180 and there’s increasing talk about being able to do both inferencing and learning—two key aspects of machine learning—on client devices. Apple didn’t mention differential privacy this year, but they did highlight that by doing a lot of this AI/machine learning work on the device, they can keep people’s information local and not have to send it up to large cloud-based datacenters. Not everyone will grasp this subtlety, but for those who do care a lot about privacy, it’s a big advantage for Apple.

On a completely different front, some of Apple’s hardware updates, particularly around the Mac, highlight how serious they’ve once again become about computing. Not only did they successfully catch up to many of their PC brethren, they were demoing new kinds of computing architectures—such as Thunderbolt attached external graphics for notebooks—that very few PC companies have explored. In addition, bringing 10-bit color displays to mainstream iMacs is a subtle, but critical distinction for driving higher-quality computing experiences.

On the less positive front, there are some key questions on the detailed aspects of the HomePod’s audio processing. To be fair, I did not get to hear an audio demo, but conceptually, the idea of doing fairly major processing on a mono speaker of audio that was already significantly processed to sound a certain way on stereo speakers during its creation strikes me as a bit challenging. Yes, some songs may sound pleasing, but for true audiophiles who actually want to hear what the artist and producer intended, Apple’s positioning of the HomePod as a super high-quality speaker is going to be a very tough sell.

Of course, the real question with HomePod will be how good of a Siri experience it can deliver. Though it’s several months from shipping, I was a bit surprised there weren’t more demos of interactions with Siri on the HomePod. If that doesn’t work well, the extra audio enhancements won’t be enough to keep the product competitive in what is bound to be a rapidly evolving smart speaker market.

The real challenge for Apple and other major tech companies moving forward is that many of the enhancements and capabilities they’re going to introduce over the next several years are likely to be a lot subtler refinements of existing products or services. In fact, I’ve seen and heard some say that’s what they felt about this year’s WWDC keynote. Things like making smart assistants smarter and digital speakers more accurate require a lot of difficult engineering work that few people can really appreciate. Similarly, while AI and machine learning sound like exotic, exciting technological breakthroughs, their real-world benefits should actually be subtle, but practical extensions to things like contextual intelligence, which is a difficult message to deliver.

If Apple can successfully do so, that will be yet another surprise outcome of this year’s WWDC.

Podcast: AR and VR, Essential Phone, Apple WWDC Preview

This week’s Tech.pinions podcast features Ben Bajarin, Jan Dawson and Bob O’Donnell discussing developments in augmented reality and virtual reality from the AWE Expo, analyzing the announcements from Andy Rubin’s Essential, and offering a preview of next week’s Apple Worldwide Developer Conference.

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My Wish List for WWDC 2017

Next week is Apple’s Worldwide Developers Conference and, along with the rest of the Tech.pinions crew, I’ll be watching the announcements closely. At this late stage, it makes little sense to try to predict what we’ll see next week – there are a number of credible reports out there about at least some aspects of what’s on tap and we’ll know the rest soon enough.

Instead, here are some of the things I’m looking for as both a user of Apple’s products and services and as an industry observer who wants to see the companies in this space keep pushing those products and services forward. I’ve done similar exercises twice in the past, in 2014 and 2016, in case you’d like to see how those turned out.

Allow iOS to Continue to Evolve to Meet Disparate Needs

I’ve called in the past for the creation of a “padOS” – a variant of iOS focused on either iPads in general or the iPad Pro specifically. The naming and separation is largely symbolic and whether or not Apple does it is less important than that it allows iOS to continue to evolve separately in its iPhone and iPad versions. Apple’s current big push around the iPad is positioning it as a fully-fledged computer that can be used for advanced productivity tasks. That means both its role and the way it functions has to evolve separately from those of the iPhone. The iPad needs to support more sophisticated multitasking, a different home screen layout, and more advanced apps than the iPhone. Apple needs to set apart the iPad version of iOS more clearly for developers so they catch Apple’s vision and believe they can create not just great experiences but great business models around apps on the iPad.

The challenge for Apple is it has to allow iOS on the iPad to evolve in such a way it doesn’t break the core value propositions of focus and simplicity which have always characterized the OS and the devices it runs on. It would be easy to say Apple should simply either port macOS to an iPad form factor or make a touchscreen Mac, but neither would be the right solution. Apple has to strike a careful balancing act between enhancing the power and functionality of the iPad without making it seem less like an iPad.

When it comes to the iPhone, I want to see what Apple can do in augmented reality, which has already been a theme in all three of the previous big developer conferences this year. With dual cameras in the iPhone 7 Plus and arguably the most used cameras in the world, Apple is in a unique position to do interesting things with AR in the native camera app. That’s still where many of us take our pictures, even if they’re subsequently exported to social media apps for sharing. So Apple has a lot of power to combine software and hardware optimization to provide interesting overlays on photos and videos and open those capabilities up to developers. I would guess this might start with lenses and filters but there’s so much more developers could invent and create, given the right tools.

Siri needs to Evolve Faster

Siri was a major focus last year but not necessarily in the ways I’d hoped or expected. Siri extensions were a great new feature and were complemented by extensions across Maps and iMessage. But Apple did relatively little to move Siri forward as a standalone voice assistant, touting relatively few advances in voice recognition, natural language processing, or its own ability to serve up more relevant responses to queries it properly recognizes and processes. I’d like to see Siri as a voice assistant become better at recognizing and understanding what I’m saying and more consistently serving up relevant responses. Apple has acquired a number of companies over recent years which should help with this and I’m hoping we’ll see some big advances this year, including more conversational and contextual understanding.

In the context of Siri, I’d love to see a home speaker from Apple that would compete with the Amazon Echo and Google Home. These devices, specifically the Home, have grown on me over the past few months as I’ve had one in my home but, as someone who’s fairly heavily invested in the Apple ecosystem, I’ve found them frustrating. I’ve had to use other music services, messaging platforms, reminder apps and so on with these devices and, while I’ve made that transition, in some cases I’ve simply found those devices less useful as a result. An Apple speaker that would combine Siri, Apple Music, AirPlay, Reminders, iMessage, and more would be a huge advance for me and, I would imagine, for tens of millions of others. I think others have been reluctant to trust Amazon or Google with their personal data or have suspected these devices were really Trojan Horses for selling more goods or ads and, therefore, resisted them.

But Siri in that device has to be really good because the bar Amazon and Google have set in the home speaker space is high, at least in terms of voice recognition. Siri has so far always been somewhat constrained by the devices which contained it, none of which were designed first and foremost for fantastic voice recognition. A home speaker would remove that excuse. Amazon and Google have shown us what can be done in a dedicated device with mic arrays designed for far-field voice recognition and Apple now has to show it can match them and, ideally, exceed them in other areas such as ecosystem integration and audio quality.

macOS needs to Continue to Integrate and Differentiate

One of the key themes of recent years when it comes to what is now macOS is integration with iOS, whether in the form of features like Continuity and Handoff which directly integrate with other devices, or whether it’s in the form of user interface conventions, apps, and so on which now exist across Apple’s portfolio. But as Apple pushes the iPad Pro towards becoming a more powerful computer, it can’t simply leave the Mac and macOS where it is – it needs to establish a distinct identity and purpose for them in contrast to the iPad Pro. That means continuing to push the boundaries of what the Mac can do that an iPad can’t and demonstrating what it can do uniquely well because of the OS, the power of the hardware, and so on.

Beyond that increased differentiation, there’s still a role for integration and borrowing concepts and user interfaces from iOS. Nowhere is that truer than in iTunes. That software began life as a way to organize and then later, sync music to iPods, but it has become so much more since. Every time I fire up iTunes on my Mac, I have to first navigate to the right broad section – Apps, Music, Movies, TV Shows, or Books – and then to either a store or library mode (or more in the case of Music). There’s simply too much going on in that app and it needs to be broken out into separate apps for Music, Video, and syncing, at the very least (possibly even with a separate store for all of the above) to focus those content apps. That would streamline consumption, make the apps less confusing and easier to use, and make people more willing to use services like Apple Music on their Macs.

tvOS needs a Clear Focus

Ever since Apple launched the fourth generation Apple TV, it’s had a dual role as both a video consumption device and a sort of low-powered gaming console. That’s caused some confusion among video-centric users who in some cases don’t see why they have to spend significantly more on an Apple TV relative to comparable Roku devices (not to mention much cheaper Chromecasts) but it has also left gamers a little frustrated that the Apple TV doesn’t do more. Apple needs to decide how serious it is about gaming and build the Apple TV hardware and tvOS to match. It either needs to shift more clearly towards the casual gaming that’s always been the hallmark of iOS, or power up both the hardware and software to enable something more like what people are used to from consoles.

But it also needs to continue to improve the TV viewing experience. I actually like the TV app Apple introduced last year quite a bit – it consolidates my viewing in a number of apps like Hulu, CBS, and Apple’s own TV and Movies apps and shows me the next episodes or available movies in each. But it’s still glitchy and incomplete – Netflix is the obvious standout on the app side but it also frequently misses episodes I’ve watched (or ones I haven’t) and serves up the wrong episode next in the queue. The concept is good but the execution needs polish. And I really need a way to separate the stuff my kids watch from the stuff I watch. Too often, the first part of my queue is made up of half-watched cartoons rather than what I want to watch next. Some combination of profiles and/or time of day smartness could solve that problem pretty easily.

watchOS needs to Figure Out the App Model

Last year’s WWDC and the fall hardware launch felt like a narrowing of focus for the Apple Watch around health and fitness. I think that was smart and reflected the fact apps on the Watch really haven’t taken off, despite several tweaks to the model. I would expect to see continued enhancements to the health and fitness features on the Watch, possibly including sleep tracking and, ideally, including the ability for third party Watch bands to incorporate more advanced sensors and feed data back to the Watch itself, though that may have to wait until the fall. Apple still needs to figure out what the role of apps is on the Watch and how to make them easier and more compelling to use.

There’s probably more I could add here but that seems to be plenty to go on with. I’m optimistic I’ll get at least some of what I’m looking for next week and I’m certain there will be things I haven’t thought of but which turn out to be great additions too. One thing is certain: with more ground than ever to cover, Apple’s going to have a tough time getting through everything in one two-hour keynote. I wouldn’t be surprised if we see some more announcements either before Monday or in later sessions.

Everybody Wants a Bite of iOS, Apple remains Mostly Self-Contained

A few hours after publishing this column, Google could be announcing that Google Assistant is going to iOS. Last week, Microsoft announced several new features for Windows 10 Fall Creator Edition, such as Pick Up Where You Left Off and OneDrive Files on Demand, will be available on iOS.

Everybody wants a piece of iOS or better, everybody wants to get to the most valuable consumers out there. You’ve heard this before — Apple customers are very valuable. You only have to look at what they spend on hardware and the growing revenue they drive at the App Store and subscription services to get an idea as to why other ecosystem owners might want to get to them.

Not Having a Horse in the Race makes You Free

When your main source of revenue is not hardware to be device, and, to some extent, platform agnostic, becomes so much easier. For Microsoft and Google, the core business revolves around cloud and advertizing respectively and, while they sell their own devices as well as monetize from their operating systems, they have made the decision to engage with consumers on iOS.

For Microsoft having Office, OneDrive and Cortana available on iOS and partly on Android allows them to reach more users than they would through their PCs alone. Of course, Microsoft has nothing to lose in mobile, as Windows Phone has never been able to get more than single digit market share in the US. Yet, this tactic is not limited to phones. These apps and services are also available on iPad and Mac, segments where Microsoft and its Windows partners have a very strong interest.

Microsoft’s long-term play was described very well at their Build Conference Keynote with the slogan “Windows 10 PCs heart all devices.” I would have gone a step further and said, “Windows 10 heart all devices” but that would not have been very politically correct towards their partners. Whichever slogan you prefer, the idea behind it is spot on. Let users pick what phone they want to use (or tablet, or wearable) but make sure that, if they have one Windows 10 device, their experience across devices is the best one they could have. By getting the best experience as a consumer, you want to continue to stay engaged and you choose services and apps delivered by Microsoft over what comes pre-installed on the phone.

Google has always had a pretty agnostic platform approach when it came to its apps and services. The experience is often better on Android but it does not mean consumers do not get benefits from using apps and services on other platforms and devices. Google Maps and Chrome might be the best example thus far but soon it might well be Google Assistant. While other platforms might limit how deep of an integration assistants such as Google and Cortana might have, they are still delivering some value to the user and they collect valuable information for the provider.

As we move from a mobile-first to a cloud-first and AI-first world, knowing your users so you can better serve them will be key. Google hoped to do that with Android but, unfortunately, despite million and millions of users owning Android-based devices, it did not provide the return Google was hoping for. Users of Android simply do not equate to users of Google services. So, making sure to get to the valuable users is key for this next phase, especially as the bond with the user will be so much tighter than any hardware or single service has been able to provide before.

Hardware as a Means to an End

Selling hardware can be a great source of revenue, as Apple can tell you. For Amazon, Google and, to some extent Microsoft, however, hardware is more a means to an end than a source of revenue any of these companies will ever be able to depend on.

Being able to personify or, in this case, objectify, the vision they have for their services and apps is key. Whether it is a home for Alexa and Google Assistant or a TV for Prime Video or an in-car experience for Google Maps, it is important users experience the best implementation of that end to end vision.

Yet, if your business stability does not depend on it, you are not spending marketing dollars to convince buyers to switch their devices or upgrade them. You are instead focusing on delivering the best value wherever you can. As you move to other hardware, however, you take value away. When there is no value left, the hardware itself will look much less appealing to the most demanding users, increasing the risk of churn. Ben Thomson recently made this very point about Apple in China where iPhone users are so engaged with services from local players the value of Apple is reduced compared to what we could experience here in the US where we might subscribe to Apple Music, use Apple Pay and so on.

Follow the Money

So where does this leave Apple and its hardware-centric business model? Well, if you have been paying attention to recent earnings calls, this leaves Apple pivoting from hardware to services, with revenues reaching their highest value yet at $7 billion. App Store revenue is growing 40% year over year with an installed base of subscribers at 165 million customers and Apple Pay transactions are up 450% over 2016.

For now, it does not look like Apple has much to worry about. Not only are the most valuable customers on iOS and macOS but they are engaged with the services and apps on offer. As the offensive from other players intensifies, however, Apple should look at playing a similar game, even if this means opening up some of its services and apps to other platforms.

Microsoft proudly announced last week that iTunes will be coming to the Windows 10 Store. Many were quick to point out that nobody really uses iTunes anymore but that seems to me a very iOS-centric view. There are still many PC users that use iTunes and they represent an untapped opportunity for Apple Music, a service they might not consider using on their phones but, as part of iTunes on their PC, could look very appealing.

There are stickier services like iMessage or Apple Pay and Siri that could drive engagement through other devices. Think about the ability to iMessage on a PC instead of using Skype. Or the option to create an Apple Pay account that works in other browsers. Or Siri that speaks to you through your appliances.

Finding the right balance between too closed or too open is not easy. We know how open can hurt interoperability but we also know how closed can limit growth. This is not about defending. That can be done by making sure to deliver a superior experience on Apple hardware so that, no matter what other apps and services are available, users will never consider anything but what is pre-installed. It’s rather about making sure no opportunity is left untapped which means to go and get the money to be had.

Apple’s AirPods: a Hit With 98% Customer Satisfaction

Last week, we ran a follow up to the voice assistant research study we published last year around this time. Creative Strategies again partnered with our friends at Experian to see what has changed with voice assistants and explore some new products as well. This year, we added Apple’s AirPods to the study since Siri integration is a key feature of AirPods. In the next few weeks, we will publish more insights around what we learned about the Amazon Echo and Google Home but will focus this article on Apple’s AirPods. We used every available resource to track down as many AirPod owners as we could. In the end, we found 942 people willing to take our study and share their thoughts on Apple’s latest product.

Customer Satisfaction
The big story is customer satisfaction with AirPods is extremely high. 98% of AirPod owners said they were very satisfied or satisfied. Remarkably, 82% said they were very satisfied. The overall customer satisfaction level of 98% sets the record for the highest level of satisfaction for a new product from Apple. When the iPhone came out in 2007, it held a 92% customer satisfaction level, iPad in 2010 had 92%, and Apple Watch in 2015 had 97%.

While the overall satisfaction number is remarkable, a second question we asked of these owners stood out even more. We used a standard benchmark question called a Net Promoter Score, which ranks a consumer’s willingness to recommend the product to others. This ranking is on a scale of 0 to 10 with 10 being extremely likely to recommend and 0 being not likely at all to recommend. It was this number that surprised me. Apple’s Net Promoter Score for AirPods came back as 75. To put that into context, the iPhone’s NPS number is 72. Product and NPS specialists will tell you anything above 50 is excellent and anything above 70 is world class. According to Survey Monkey’s Global Benchmark of over 105,000 organizations who have tested their NPS, the average is an NPS of 39.

This incredibly high Net Promoter Score intrigued me for another reason. We know from profiling questions that most Apple AirPod owners fall into the early adopter category. This is not surprising since early adopters are generally the first among people to buy new technology products. We discovered something interesting in the first few sets of early Apple Watch research, as well as our studies on Echo and Google Home — early adopters tend to not give products high recommendations. The first few studies we did on Apple Watch had a lower NPS as did the Amazon Echo and Google Home. Early adopters tend to understand they buy products early and, oftentimes, they do not feel those products are ready for the mainstream. Certainly, a product’s NPS ratings goes up or down over time, but our experience and years of data on this subject are clear that early adopters rarely give new technology products a high NPS. AirPods broke the mold in this case as even the harshest critics and users of new technology (early adopters) felt AirPods are ready for the mainstream.

We asked respondents to briefly explain their ranking and an analysis of the most frequently used words by respondents were:

  • Fit
  • Magic
  • Sound Quality
  • Convenient
  • Love
  • Good Sound
  • Battery Life

While those were some of the most common words used by our participants, many general themes in the write-in section were quite telling. Folks raved about the pairing process with their phone. Many indicated how surprised they were by how well they worked citing bad experiences with prior Bluetooth headphones. Another common theme I spotted in the write-in section was consumers saying they did not realize how convenient and useful wireless headphones were since AirPods were their first pair. Many indicated they liked the AirPods even more than they thought they would. That’s always a sign of a great product.

While there was some negativity in the write-in section, it was mostly around concerns or issues with fit or connectivity problems. But these were certainly an extreme minority.

Feature Satisfaction
We took the study a little deeper as well, looking at customer satisfaction around certain features.

I charted the top six features with the highest satisfaction. The number that stood out most in this top list of features is comfort and secure fit. There was a great deal of debate about AirPods when they first came out that not having a cable means it will make them not stay in or people will lose them easily if they fall out. We can now dispel that myth as Apple has designed a product that fits most people’s ears and, more importantly, fits securely and do not fall out for the vast majority of owners. Only 4.6% of AirPods owners who participated in the study said they were dissatisfied with the fit and ability to fit snugly.

Consumer Sentiment for AirPods
Lastly for the AirPods part of our study, we added some general sentiment questions to see what kinds of feelings or emotions consumers agreed/did not agree with regarding AirPods. A couple of stand out answers are worth mentioning.

  • 84% of respondents strongly or somewhat agree that using just one AirPod at a time makes sense in certain situations. This means AirPod owners are actively using just one AirPod at a time in some contexts. Not necessarily a new behavior if we reflect back to the Bluetooth earpiece days for making calls, but certainly an additional value proposition to Bluetooth headphones as a category.
  • 88.97% of respondents strongly or somewhat agree AirPods consistently pair to their iPhone as soon as they put one in their ear. While Bluetooth reliability has come a long way, we know many Bluetooth headsets on the market do struggle with pairing consistently quite often. This data point suggests instant pairing reliability of AirPods is quite high.
  • 82.5% of consumers would like more control over their content by tapping the AirPods to do things like turn volume up or down or skip to next song. Right now that can be done manually or by asking Siri to turn the volume up or down or skip to next song but it appears some way to have more control of media by touching or tapping the AirPods themselves is desirable.
  • 82% of respondents strongly or somewhat agree AirPods are their favorite Apple products launched in recent memory. What makes this question interesting is the fact that, while our respondents mainly lean to early tech adoption, we do not have a massive group of hardcore Apple fanatics. Knowing that makes this question all the more interesting. Overall, our respondents feel Apple has released one of the best products in a long time.
  • 62% of respondents strongly or somewhat agree AirPods are causing them to consume more audio content (music, books, podcast, etc) than before they owned AirPods. This is fascinating as it could indicate AirPods become a catalyst for more of Apple or third party services.
  • Lastly, we wanted to see how much our participants in the study still defaulted to old habits or didn’t trust AirPods enough to completely go wireless and fully ditch their wired headphones. To our surprise, 64% of consumers somewhat disagree or strongly disagree they keep wired headphones handy just in case AirPods don’t work.

Apple has accomplished a rare feat we have not seen in many years of studying owners of brand new technology products. They have succeeded at delivering a product with an industry best customer satisfaction rating and Net Promoter Score rating. Those two things alone highlight the quality of AirPods overall and the reality that there will be very few unhappy owners of Apple’s latest product.

Podcast: Facebook F8 Conference, Apple Diabetes Tool

In this week’s Tech.pinions podcast Tim Bajarin, Jan Dawson and Bob O’Donnell discuss the wide range of developments from this week’s Facebook F8 Conference, as well as rumors that Apple may be developing a tool for monitoring diabetes.

If you happen to use a podcast aggregator or want to add it to iTunes manually the feed to our podcast is:

The iPhone’s 10th Anniversary Gift should be A Revitalized Apple ‘Experience’

In June, we will commemorate the 10th anniversary of the release of the iPhone. In recognition of this signature date, there’s more than the average amount of speculation on what the 2017 edition of the iPhone will sport and hope it might revitalize the smartphone sector, which is experiencing somewhat of a slowdown.

I have no doubt the iPhone 8, X, or whatever it might be called, will be terrific – as nearly all high-end phones are today. Samsung, with its launch of the Galaxy S8 line last week, pushed the envelope even further, particularly with respect to screen size/display, and innovative features such as DeX.

But what has historically given Apple that cachet and ability to charge a premium for its products is the “ecosystem”. When at the top of its game, Apple’s hardware, software, apps, and media all work magically and seamlessly together. However, even more than the commoditization of the smartphone category, there has been a slow and steady erosion of the vaunted ‘Apple Experience’. This mainly has to do with Apple’s software and services, where the company has lost some of its edge. iTunes, which is now 16 years old, has become bloated– more of a turn-off than a turn-on. Apple’s signature applications such as e-mail/contacts/calendar, photos, music, and TV are all OK, but they’re not great. iCloud has not completely fulfilled its mission and an increasing number of Apple users see the whole iTunes/iCloud/Music blend as sort of a hot mess.

All the while, Google has steadily gained. I’d argue devices and software in the Google/Android/Chrome world now work and sync more seamlessly than in the Apple/iOS/macOS world. Amazon has become the high beta company in tech, with keen innovations and successful products in hardware and software, while exploring new frontiers in areas such as AI. And Microsoft has staged a comeback of sorts, with successful transitions in cloud and a better reimagining of the ‘post-PC’ world, even without a smartphone product.

Apple’s recent hires and actions signal a new recognition and urgency. The company hired Shiva Rajaraman from Spotify to help reshape the music and video experience, new Apple TV executive Timothy D. Twerdahl was hired away from Amazon, and it appears the Mac Pro and iMac line will be getting more love. Reshaping the software and services experience seems to have become a priority.

So, what would a reimagined Apple experience look like? I suggest five pillars:

1. Revamp or Ditch iTunes. This product has had pile after pile of updates and refreshes but seems outdated and disjointed from Apple’s music, video, TV, and photo offerings. What, really, is the role of iTunes in a world of App Store, Apple Music, Apple TV, and iCloud? It should be renamed since today it’s mostly a store and ‘control center’ for settings and management of multiple devices (though some of that has been subsumed by iCloud). The user interface needs to be re-imagined and navigation/synchronization made simpler and more intuitive.

2. Improve iCloud. I feel like iCloud has changed from something as the place all content is shared and safely stored to something that must be managed and is needlessly complex. Many consumers still aren’t fully comfortable with ‘cloud everything’ and how content moves on and off the device. Apple isn’t doing itself any favors here. Example: when you enable ‘family sharing’ for music, you are then told to “delete” your music and then “turn on iCloud” which will ‘restore’ your content. For any consumer who, at some point has lost a hard drive, failed to do a backup, or somehow hasn’t gotten this cloud thing right (i.e. most of us), this is a moment fraught with anxiety.

3. Determine What’s Next with Mail, Contacts, Calendar. These are signature productivity apps but Apple’s versions now seem more workmanlike. Is there something here that could revitalize the category and ‘delight’ rather than merely ‘satisfy’? Despite all the messaging alternatives, it still looks like email is here to stay.

4. Continue to Invest in the PC. Stagnant tablet sales, innovative new combo products on the Windows side, and growing success of Chrombeooks show the ‘post-PC’ world has not evolved in quite the way the late Steve Jobs imagined. The PC will still be the anchor productivity device for the foreseeable future, as shown in a recent survey by Creative Strategies, Inc on Millennials’ device preferences. Apple has work to do in figuring out how the PC and macOS fits into its world going forward. I’ll also go out on a limb and argue this is one category where Apple should consider relinquishing its insistence on having premium products at super-premium prices. One, because in the current product line, it’s not justified. And two, because they don’t want to cede the entire under-30 generation to other platforms. It might not be such a bad idea to have a solid but more affordable Mac product to keep folks fully bought into the Apple ecosystem.

5. Regain the Service Halo. This is harder to quantify but my sense is Apple’s size, and intense pressure to grow, has created the perception the company tries to extract one’s dollar at nearly every opportunity. There was a time when you could get customer service help on the phone without having Apple Care (if you asked nicely). Or, if you brought in a cracked screen a month after you bought the latest iPhone, a ponytailed Apple Store employee would wink and hand you a new one, no questions asked. You felt like Apple had your back, in a way that felt different than other companies and justified, in part, the premium price for their products.

Ten years after the launch of the iPhone, the core of Apple is still very much there. But Silicon Valley’s other biggies – Google, Microsoft, Amazon, Facebook, and Netflix – are all now more significant forces in software, content, and services, making it more challenging for Apple to be in a class by itself as it was for a few years. Which makes me hope that Apple’s tenth anniversary iPhone is about more than just the phone.

Should Apple Build a Car?

As your mother or other caregiver likely told you as a child, just because you can do something, doesn’t mean you necessarily should.

So, given last week’s news that Apple has obtained a permit to test drive three autonomous cars on public streets and highways in California, the existential question that now faces the company’s Project Titan car effort is, should they build it?

Of course, the answer is very dependent on what “it” turns out to be. There’s been rampant speculation on what Apple’s automotive aspirations actually are, with several commentaries suggesting that those plans have morphed quite a bit over the last few years, and are now very different (and perhaps more modest) than they originally were.

While some Apple fans are still holding out hope for a fully-designed Apple car, complete with unique exterior and interior physical design, a (likely) electric drivetrain, and a complete suite of innovative software-driven capabilities—everything from autonomous and assisted driving features, the in-vehicle infotainment (IVI) system, and more—other observers are a bit less enthusiastic. In fact, the more pragmatic view of the company creating autonomous driving software for existing cars—especially given the news on their public test driving effort—has been getting much more attention recently.

Regardless of what the specific elements of the automotive project turn out to be, there remains the philosophical question of whether or not this is a good thing for Apple to do. On the one hand, there are quite a few major tech players who are trying their hands at autonomous driving and connected car-related developments. In fact, many industry participants and observers see it as a critical frontier in the overall development and evolution of the tech industry. From that perspective, it certainly makes sense for Apple to, at the very least, explore what’s possible, and to make sure that some of its key competitors can’t leapfrog them in important new consumer technologies.

In addition, this could be an important new business opportunity for the company, particularly critical now that many of its core products for the last decade have either started to slow or are on the cusp of hitting peak shipment levels. Bottom line, Apple could really use a completely different kind of hardware hit.

The prospect is particularly alluring because some research conducted by TECHnalysis Research last fall shows that there is actually some surprisingly large pent-up demand (in theory at least) for an Apple-branded car. In fact, when asked about the theoretical possibility of buying just such an automobile, 12% of the 1,000-person sample said they would “definitely” buy an Apple car. (Note that 11% said they would definitely buy a Google-branded car.) Obviously, until such a beast becomes a reality, this is a completely speculative exercise, but remember that Tesla currently has a tiny fraction of one percent of car sales in the US.

Look at the possibility of an Apple car from another perspective, however, and a number of serious questions quickly come to mind. First, is the fact that it’s really hard to build and sell a complete car if you’re not in the auto industry. From component and supplier relationships, to dealer networks, through government-regulated safety requirements, completely different manufacturing processes, and significantly different business and profitability models, the car business is not an easy one to successfully enter at a reasonable scale. Sure, there’s the possibility of finding the auto equivalent of an ODM (Original Device Manufacturer) to help with many of these steps, but there’s no Foxconn equivalent for cars in terms of volume capacity. At best, production levels would have to be very modest for an ODM-built Apple car, which doesn’t seem like an Apple thing to do.

Speaking of which, the very public nature of the auto business and the need to reveal product plans and subject products for testing well in advance of their release is also very counter to typical Apple philosophy. Similarly, while creating software solutions for existing car makers is technically intriguing, the idea of Apple merely supplying a component on products that are branded by someone else seems incredibly unlikely. Plus, most car vendors are eager to maintain their brand throughout the in-car experience, and giving up the key software interfaces to a “supplier” isn’t attractive to them either.

So, then, if it doesn’t make sense or seem feasible to offer just a portion of an automotive experience and if doing a complete branded car seems out of reach, what other options are left? (And let’s be honest—in an ideal situation, autonomous driving capabilities should be completely invisible to the driver, so what’s the brand value for offering that?)

Theoretically, Apple could come up with some type of co-branded partnership arrangement with a willing major car maker, but again, does that seem like something Steve would do?

There’s no doubt Apple has the technical ability and financial wherewithal to pull off an Apple car if they really wanted to, but the practical challenges it faces suggest it’s probably not their best option. Only time will tell.

In the Market for a Tablet? No-Brainer to buy an iPad

I am sure you know by now Apple has announced a new iPad model simply called iPad – aka the 5th Generation. This is not quite an update to the Air 2 as some of the features, such as weight and thickness, are the same as the Air.

The fact Apple did not hold an event for the announcement had more to do with not setting high expectations than with the significance of this product. The 9.7” iPad has been the most popular model for Apple. Since moving to the iPad Air line, Apple has been able to please customers who thought they wanted a smaller form factor. In reality, what they wanted was the higher portability that comes with a lighter device. The price drop of the older Mini generation helped buyers who wanted the most affordable iPad but would have not necessarily picked this product based on screen size.

Apple believes there is still a market opportunity for iPad both as people upgrade older models and as they discover iPads for the first time. For many consumers, however, making the jump to buying the first iPad or upgrading to a new model has not been easy. Depending on where you are in the process, there are either cheaper Android alternatives marketed as equals or the iPad you are using still fulfills your needs, making it hard to justify an upgrade.

This week, Apple made buying an iPad simpler and more affordable. The new line up is pretty clear:

    • iPad Mini is no longer the entry level iPad with consumers choosing this option based on form factor rather than price
    • No need to use the Air name as iPads are all lighter and slimmer than they were before the Air was introduced. I made the same argument for the MacBook Air when the new MacBook was announced and we’ll see if I am right
    • 9.7” is not only the most popular size but it is where Apple sees the future of iPad as it plays well in consumer, enterprise, and education. So the price aggressively comes down to $329
    • iPad Pro remains the flagship for people who want the best and/or people who are ready to make the switch from a PC or a Mac and make the iPad Pro their main computing device. The two sizes offer choice depending on your mobility requirements.

Tablets remain a category of device many consumers do not see as necessary. In fact, according to a GWI report, only 5% of online Americans consider a tablet as their most important device to access the internet, whether at home or elsewhere. This compares to 24% for smartphones and 40% for laptops. This lack of a clear role limits how much consumers are prepared to spend on them. Yet, when people use iPads satisfaction is high.

According to J.D. Power, iPads have the highest satisfaction in the category at 830 (out of 1000). Satisfaction is measured across performance, ease of use, features, styling and design and cost. iPads outperform the competition on every factor aside from cost. Apple just addressed this very point.

 Apple is not going to Concede the Education Market to Chromebooks

Tablets are not just a consumer play and Apple is very well aware of that. Over the past year or so, Apple has been focusing on empowering their iPads in the enterprise through partnerships with IBM and SAP. Education is another major market for iPads but lately, Apple has been under pressure from a growing number of Chromebooks being used, especially by K-12 schools.

While $329 is an aggressive price in the consumer market, Apple pushed even more on education and will make the new iPad available through its education channel for $299. Targeted, aggressive pricing is something Apple is willing to do for certain segments and done in a way that does not negatively impact the brand.

Apple also collaborated with Logitech to make a rugged case available through the same channel, priced at around $99. Logitech will also offer an add-on keyboard for the rugged case and a “Rugged Combo”.

While even at this price, Apple remains higher than Chromebooks. But there is more than just iPad Apple brings to the table compared to Chromebooks. Once the price gap closes, the other factors hold a different weight. Apple’s app ecosystem is much larger than what Chromebooks have to offer and the fact Android apps will run on Chromebooks will not make the situation much better. Many of the Android apps available in the store are still not optimized for tablet use, which of course, limits how user-friendly and rich the experience can be. Accessories ecosystem is also a plus for Apple as it lets the iPad better fit in with other tools teachers might be using in the classroom. The last point I think worth mentioning is security. Apple’s strong focus on privacy and security for its devices and the apps that run on them is an added benefit I am sure schools consider. Google and Apple both offer specific education tools to monitor access on the devices to limit vulnerabilities but the cloud/browser-based nature makes that more challenging. Of course, the fact Google Docs work well on iPad is a reassurance for teachers who are invested in those tools.

The education market is certainly becoming a battleground for Google, Apple, and Microsoft. It will be interesting to see who will focus on a more holistic experience that centers on empowering teachers and students to teach and learn vs. facilitating admin and management of kids and staff.

In Other News

There were more Apple announcements on Tuesday.

There was an updated storage option for the iPhone SE that now starts at 32GB for the same price of $399 and a small $50 premium for the 128GB version. This is a sensible move by Apple to future-proof this line for further software upgrades.

To celebrate the ten year anniversary of support for Product RED and the fight against HIV, Apple released a RED iPhone. This is a first for Apple who have done several RED products over the years — iPods, Beats headsets, iPhone and iPad Cases — but never an iPhone.

Lastly, Apple announced Clips, a video editing app that will be available as a free download in April. Despite some confusion on social media, this is NOT a competitor to Snapchat or Instagram. Clips is about creating content to be shared on the social platform of choice. iPhone is used more and more for pictures and videos and giving users the opportunity to add features such as stickers, lenses, and filters makes a lot of sense. Apple is aware, however, that its audience is not made up of social savvy teenagers only. So Clips comes as a separate app rather than being integrated into the main camera app. First and foremost, this approach avoids annoying users who are not interested. It also offers Apple an opportunity to further develop Clips by adding other capabilities in the future – think AR.

It remains to be seen, however, if avid Snapchat and Instagram users will be interested in creating the content in Clips before they share it through their social platforms. If Clips takes off, Apple would have created direct user engagement and would have shifted value back to the hardware and, ultimately, leave to the social network platform the delivery portion of the engagement.

Clips is a great example of the kind of first party apps Apple should be focusing on to add value to hardware. While the wider ecosystem is a great strength and the balance of keeping partners and developers engaged is tricky, there is certainly room for Apple to do more.

Has Apple Lost the Current Generation of Students?

When I worked for Apple in the 90s, there was a constant push to put Apple computers in schools so students would be more likely to become Apple customers for life. Now, nearly 30 years later, we read how Apple is falling behind in the use of their products in schools.

According to an article in the New York Times:

Over the last three years, Apple’s iPads and Mac notebooks — which accounted for about half of the mobile devices shipped to schools in the United States in 2013 — have steadily lost ground to Chromebooks, inexpensive laptops that run on Google’s Chrome operating system and are produced by Samsung, Acer and other computer makers.

Mobile devices that run on Apple’s iOS and MacOS operating systems have now reached a new low, falling to third place behind both Google-powered laptops and Microsoft Windows devices, according to a report released on Thursday by Futuresource Consulting, a research company.

Futuresource notes Chromebooks count for 58 percent of the 12.6 million mobile computing devices shipped to primary and secondary schools in the United States in 2016, up from 50% in 2015. During the same period, iPads and Mac laptops fell to 19 percent from about 25 percent. Microsoft Windows laptops and tablets remained relatively stable at about 22 percent.

These statistics confirm what I’ve experienced firsthand. I initially became aware of Chromebooks in schools when my 12-year old grandson told me last year how many of his classrooms in his Bay area school were equipped with Chromebooks. He then showed me how he used it to do work at school, go online from his home computer to the school’s portal to check and finish his work, submit his homework assignments, get scores of his tests, and use Google Docs to write his essays.

When I asked about iPads in school, a product he uses at home, I got rolled eyes, as if I were in the Stone Age. He explained how less useful and how more expensive iPads are for the things he does at school. He said their Chromebooks cost $200 while iPads are more than twice that amount and have no keyboard.

But it wasn’t until I spoke with his 8-year old brother and my other grandson I realized how much more aware they are of technology products at such a young age — younger than any generation before.

While his parents waited for their older son to graduate 5th grade before getting him an activated phone (an iPhone 5C), the younger one uses an inactivated Samsung Galaxy 6 with a home WiFi connection, primarily as a game player. Yet, he figured out how to make calls, send messages over WiFi using WhatsApp and, when he wants to use it away from home for playing Pokémon Go, he makes sure his brother or mother is with him so he can connect to their hotspot.

When I asked each what phone they prefer, iPhone or the Android, both brothers spoke up in unison and unequivocally said Android. They each reeled off a list of comparisons between the two operating systems that would make a reviewer proud. They both prefer Android because they like Google Voice more than Siri, the weather app on better, and criticized the iPhone for its shorter battery life and no headphone jack. When I asked the 8-year old what phone he liked the best, he said the Galaxy 7 because it was waterproof and had a curved display.

Now, anecdotal stories from 8 and 12-year olds are just that but, taken with these new findings, it should be a concern to Apple. While we adults complain about the slow pace and limited innovation at Apple, it’s something apparent even to youngsters who take technology for granted, are more adept with devices, and have a technical proficiency that may negate Apple’s easier to use interface — the primary advantage Apple could offer to earlier generations.

How Apple might Deliver AR on the iPhone

If you follow the world of tech, you know that two of its new big things are AR and VR. VR got a major push with the introduction of Oculus Rift and made Oculus a household name once Facebook bought the company. Since then, HTC’s Vive and Sony’s Playstation VR have delivered VR headsets and Microsoft is working hard to deliver a mixed reality solution around HoloLens. Samsung and Google are both trying to deliver a VR experience through smartphones aided by low-cost VR headsets. At the moment, VR is mainly aimed at gaming but it has had some buy-in with vertical markets such as travel, entertainment, sports, and even advertising. However, VR is in its very early stages and requires a head mounted display and will take many years to get into the broader consumer market.

Last year, a large consumer audience was introduced to AR via Pokemon Go, which allows for characters to be superimposed on real life settings as part of the game. This game gave consumers a small taste of what AR is about and has left them wanting more of this technology on their smartphones.

Google has realized the smartphone is an important vehicle for delivering AR and has created the Tango AR platform that is currently deployed in Lenovo’s Phab 2 Tango phone and will soon be in other smartphones as well. In this case, the AR experience is just delivered on the smartphone and the Tango platform is designed to help develop AR apps for use on Tango-supported phones. The Tango AR platform is still in its early stages and few Tango apps are even available to take advantage of this platform. But it is an important AR program for the Android crowd and needs to be watched closely to see how Google and their partners use this platform to bring AR to more Android phones in the future.

There is a school of thought that says the best way to deliver AR is through some type of glasses or goggles. In the end, a mixed reality set of eyewear will be the best way to make VR and AR deliver on the promise of bringing this technology to the masses. The problem is this eyewear is expensive now and, especially in VR cases, they have to be powered by a PC with a graphics card to get the full effect.

Tim Cook has repeatedly stated Apple sees AR as the more interesting product at the moment and, while not discounting VR, he seems to suggest that, if Apple does get into this new area of VR and AR, AR will be the technology they will drive first to their platforms.

There have been rumors Apple is working on a set of glasses that could be part of their AR solution but, even if they have this in the works, I just don’t see that coming this year, or even next year, given the costs and lack of AR-based apps to support them.

If Apple decides to bring AR to iPhones soon, I believe Apple’s initial move into AR will be at the platform level and delivered on some next generation iPhones. This is just speculation on my part but it is highly plausible Apple tackles the AR opportunity by creating a special AR SDK kit for iOS that takes full advantage of the two cameras in the iPhone 7 Plus and, most likely, will be in some new iPhone models they release in the fall. There are additional rumors Apple has a special 3D camera coming in some high-end models. If that is true, this camera may also play a key role for user-created AR content on this special AR platform.

By creating an iPhone that supports a special AR SDK, Apple could be well positioned to expand the idea of AR-based apps and features to millions of users almost overnight. Like other SDKs of the past, first generation AR apps could be pretty straightforward and, like Pokemon Go, allow a person to just place virtual objects or specialized information on top of a live image. Imagine going into a museum and pointing the iPhone at a woolly mammoth and seeing information about this animal on your screen. Or, if you are in NYC and have the Empire State Building in your view, you point the camera at it and see data about its dimensions or info on its history.

It could utilize the cameras in innovative ways for anyone to create specialized AR content of their own. Over time, and with a powerful AR SDK kit to work with, developers could innovate on this special platform and create AR content we can’t even imagine at the moment.

Although I have no clue if Apple will actually do an AR SDK optimized for new iPhones, Tim Cook’s fascination with AR at least suggests AR is very much in their crosshairs. If they do, I expect it to follow Apple’s proven playbook in which they develop innovative new hardware, tie it to an enhanced OS, then create a special SDK for developers to allow them to create innovative AR apps and make the iPhone a window to the world of AR-based functions and applications.

Side note: If Apple does deliver an iPhone optimized for AR, this could start a new super cycle for iPhone replacement and drive huge numbers of iPhone sales for another three years. Many financial analysts believe Apple kickstarted this super cycle of replacement growth with the iPhone 7. But I suspect an AR-based iPhone would pretty much kick this super cycle into high gear and last well into 2020.

The Tablet Computer is Growing Up

I vividly remember when the iPad first hit the scene. Much of the commentary at the time ranged from confused, to skeptical, to wildly optimistic and then some. However, very few people truly grasped the underlying shift to the touch-based computing paradigm that was underway. In fact, throughout a good portion of the tablet computer’s life, the form factor has continually fallen short of its full potential. Most were convinced this device could never be a productivity machine. These folks missed the broader reality that many millions of people were being extremely productive on their smartphones using a touch-based operating system and generations of young people would grow up with an intense familiarity and comfort level using touch-based systems as their primary computing platforms. It was this broader shift of workflows, from a mouse and pointer to ones which used touch, that I articulated in one of my first public columns back in 2010. “From Click to Touch – iPad & the Era of Touch Computing”:

It is interesting to have observed the barrier to computing a keyboard and mouse have been for so long. I was always amazed at how older generations stumbled with a keyboard and mouse, or how the biggest hurdle of learning computers for my children was the keyboard and mouse. Even my youngest, who had issues with the mouse and is just learning to read, is operating the iPad with ease and engaging in many learning games she couldn’t on the PC with the traditional peripherals. Think about the developing world and the people who never grew up with computers the way we in America have with a mouse and keyboard. How much more quickly will they embrace touch computing?

This point, which I have expanded on and further articulated through the years, has served as the basis of my bullish view on the tablet’s potential. Touch-based operating systems, built from the mobile/smartphone experience, eliminate the complexity that exists with Windows and macOS and makes computing more accessible to the masses who are, admittedly, not the most technology literate people. Mobile operating systems like iOS and Android abolish the need for tech literacy classes yet still yield the same potential end results in creativity and productivity as any desktop OS.

In the years since the iPad’s launch, the broad observation of the power in touch/mobile operating systems has manifested itself with Windows and the PC ecosystem creating products more like tablets, Apple with the iPad Pro, and now Samsung with the Galaxy Tab S3 just announced at Mobile World Congress looking to make tablets more like PCs.

However, now we are several years down the road. My concern is tablets have not gained as much ground on the PC as the PC has gained on tablets. It’s true iPad has tens of thousands of dedicated apps and both iPad and Android tablets are utilized in enterprises for mobile workforce computers but, when it comes to the average consumer, they are still not turning from their PCs to iPads or Android tablets as a replacement. In a research study we did in the second half of 2016 on consumers usage and sentiment around PCs and tablets, 67% of consumers had not even considered replacing their PC/Mac with an iPad or Android tablet.

As you may have seen, the tablets trend line is not encouraging.

While it is true the PC trendline isn’t much better, over the past year or so a fascinating counter-trend has been happening in the PC industry. The average selling price of PCs is actually increasing. In the midst of the tablet decline, many consumers are realizing they still need a traditional laptop or desktop and are spending more on such computers than in many years past. Our research suggests a key reason is because consumers now understand they want a PC which will last since they will likely keep it for 6 years or more. They understand spending to get a quality product, one that won’t break frequently or be a customer support hassle, is in their best interests and they are spending more money on PCs than ever before. This single insight is a key source of my concern for the tablet category.

Another key data point in the tablet and PC conversation is how the tablet continues to fall by the wayside when it comes to the most important device to consumers. While the smartphone is the obvious choice consumer pick as most important, the tablet still ranks lower than both desktops and laptops — this is true of iPad owners as well. Tablets and the iPad have yet to overwhelmingly move from luxury to necessity for the vast majority.

I’m still as bullish as ever on the tablet’s potential. However, my concern is consumers may be extremely stubborn and lean heavily on past behavior and familiarity with PCs instead of going through the process to replicate the workflows and activities they did on their PCs and transition to tablets. This is a year where Apple needs to take great strides in software around iOS for iPad if they want the iPad to become more than it is today and truly rival the PC in the minds of the consumer. While tablets have no doubt grown up, they still have a little more growing to do if they want to truly challenge the PC and Mac.

Apple Watch + AirPods: Show Me the Magic!

Last week, Apple released its Q1 FY2017 earnings and announced its highest quarterly revenue yet as well as all-time revenue records for iPhone, Services, Macs and Apple Watch. During the quarter, Apple sold 78.3 million iPhones prompting, once again, a discussion on Apple’s strong dependency on the iPhone. While this comment is fair and one Apple is well aware of, the comments that Apple has failed to bring to market another product with the same broad appeal of iPhone, commanding the same premium, is less so. It is less fair, not because it is not true but because such commentary fails to account for the fact no other single device is likely to have the impact smartphones have had on technology and, more broadly, on our lives.

Another common argument shared by some Apple critics is that the inability to deliver a killer product rests solely with Tim Cook. When we consider the two new lines of products Apple brought to market under Cook — Apple Watch and AirPods — I struggle to see how people could honestly believe Cook is failing.

Apple Watch and AirPods are very different products that have a lot to offer Apple as a brand, both as standalone products but, even more so, when they come together.

Apple Watch Gives Back What You Put In

I have been wearing an Apple Watch every day since it first came out. Yet, whenever people ask me if I love it, I hesitate to say I do because it is hard to explain why. Apple Watch gives back what you put in. You need to invest some time in setting up your preferences when it comes to notifications, pick your apps, buy into fitness, and add your credit cards. Most importantly, you need to trust Apple Watch to pick up some of the responsibility you have given to your iPhone for so long. When you do so, Apple Watch becomes a trusted companion you will not easily go without.

The problem Apple Watch is facing is that it did not reinvent the smartwatch category — it improved it. And, as consumers remain unclear on what role smartwatches play, it is hard for many to understand the value Apple Watch could bring to their connected life. In a recent study we ran at Creative Strategies, we asked US consumers if there was a tech product they purchased or received as a gift they liked more than they thought they would. When we looked at what device Apple Watch owners mentioned, if any, we found 53% said Apple Watch, proving there is certainly a return on investment in the product. Across all early tech consumers, however, only 9% mentioned Apple Watch as the device they liked more than they thought.

Over the past few months, with the arrival of Apple Watch Series 2 and watchOS 3, we have heard Apple compare Apple Watch’s performance to the watch industry and not just because it makes the numbers look better. Apple understands the real magic is what mainstream consumers find in Apple Watch as an upgrade from a traditional watch rather than what early tech adopters might find in comparing Apple Watch to previously owned wearables as the above data suggest. Data aside, if we consider how Apple is dominating the smartwatch market and how competitors are moving more and more to make their smartwatches look like a traditional watch, it seems natural to use that market as a measure of comparison. As John Gruber said: it is time to consider Apple Watch as a watch.

Apple AirPods, Practically Magic!

This is the slogan of Apple’s AirPod commercial and, if you ask anyone who has tried them, they will agree. The feeling of magic is not because the user is aware of Apple’s unique approach of having two separate streams of music play simultaneously into each AirPod. The magic is delivered as soon as you pair your AirPods by simply taking away any pain previously inflicted by Bluetooth-enabled headphones requiring you to pay attention to flashing colored lights while pressing odd buttons. The initial ease of use carries over into everything you do as you let Siri work its way into your ears.

In the study mentioned earlier, among the early tech adopters who said there was a product they liked more than they thought, 38% mentioned Apple AirPods. This number is even more telling when you consider they refer to early tech buyers where most of the purchases (91%) are occurring today.

While overall performance is great, I do strongly believe most users are buying first and foremost into the magic and will strongly recommend AirPods based on their visceral experience. The AirPods magic is also what has prompted some commentators to say Apple got its groove back and AirPods are the kind of product Steve Jobs would have done. So does magic sell more?

Magic Might Be Short-lived, Usefulness Rarely Is

No, magic does not necessarily sell more products but it makes it easier to sell. Instant magic will make for a product that sells itself but such products might have to be conceptually simpler in the experience it delivers in order for the magic to work. You know how to use headphones. There is very little you need to learn in order to appreciate AirPods and what is appreciated is common across the user base. This helps tremendously with user promotion, something consumers look for more and more when researching what products to buy. Other products, like Apple Watch, are more complex in the value they deliver because users will appreciate different features. What I might see as magic, someone else might not. This makes for a more complex sales process in the store as well as in the marketing message. Yet, the engagement the user will have with the product will not be in any way less meaningful. A way around this complexity could be to focus on a feature with broad appeal and turn that into magic. Apple is currently doing exactly quite successfully with the “depth effect” on iPhone 7. Most iPhone users use it as their main camera and get a visceral gratification from the depth effect.

What is particularly fascinating about Apple Watch and AirPods is that using them together allows them to feed off of each other’s strength to deliver a whole new kind of magic. I strongly believe more and more of Apple’s future success will be built on the magic of devices working together at home, at work or in the car.

Why Apple can’t Lose the Future Services Battle

I recently found myself in a conversation with some friends (thanks again to Dan M. (@OhMDee), @zcichy, and Eric (@mobile_reach) I made on Twitter (yes, you can make friends on Twitter). Our conversation was a frequently productive and sometimes frustrating back and forth on Apple’s privacy position and what risks it may have on their future competitiveness with services, namely AI/Siri.

While Apple is not going to be a pure play services company, there is no doubt services will play a much larger role in consumer experience in the coming years. It is reasonable to believe one’s ability to compete in features around machine learning and, eventually AI, will depend on the depth and quality of data acquired to train your networks and AI assistants. So let’s start by looking at Apple’s relationship with customer behavior data.

Is Apple Getting Enough Useful Data?
Apple’s relationship with customer data has always been clear. If you agree to share analytics/diagnostic information with Apple, you are opting-in to share some data with Apple. They are upfront about what this data is used for as they state very clearly they are collecting data on user behavior which will be used to help make products and services better in the future. Pointedly, a key difference here, as opposed to many other services, is even if you opt out of sharing data, you still get to use the full features of the service. With their advancement in tactics around privacy, including differential privacy, they are purposefully anonymizing that data so any information collected — things you say to Siri, what apps you install, what news you read in Apple News, etc. — can never be tied back to the individual. The technical term for this is Personally Identifiable Information. Apple’s goal is to make it so no information collected can ever be tied to personally identifiable information. While no one will dispute Apple’s attempts to go above and beyond to protect our privacy is admirable, there are a few concerning points I’d like to call out.

First, we have acknowledged Apple is using information about us to make their products and services better. But we simply have no idea how much information is being collected or analyzed. The rub is Apple’s services are progressing (or, at least, feel like it quite often) at a rate much slower than other companies who do collect and analyze more customer behavior data like Google, Facebook, and Amazon. There is no doubt Siri still has advantages in global language support and integration across all of Apple devices while the competition still has limitations. While Siri is certainly competitive with Google Assistant and Amazon’s Alexa (none of them are perfect yet or without faults) you have to admit both are pretty advanced and comparable to Siri in many ways. Both Google’s Assistant and Amazon’s Alexa have been on the market less than a year while Siri has been on the market in five years. Despite technical advancements in machine learning and natural language processing during that four year gap that benefited Amazon and Google, there is no doubt in my mind their massive data sets on behavior was useful in feeding their backend engine to reach near parity with Siri from a machine intelligence standpoint.

Look at my brief time on Android using Google Now compared to Apple’s Proactive and now Siri apps. Both are supposed to be learning about me and making intelligent and contextual recommendations that sometimes work but more often than not, don’t. I’ve been on iOS since 2007 yet, a few months on Android yielded better contextual and relevant recommendations on a more consistent basis than both Proactive and Siri. This observation leads me to believe competing services are learning and getting better, faster by using more of my behavior data to analyze than Apple. The only thing I can think of is it’s because of Apple’s desire to have a hands off approach to my data.

All of the above points lead me to my final observation. I believe it is essential that Apple is competitive with services like Siri, and many others, against those whose business models depend on more on data collection than Apple’s. While I don’t believe Google and Facebook are the bad actors Apple portrays them as (and neither do consumers via evidence from our surveys), the bottom line is their business model, the financial lifeblood of their company, depends on their ability to sell advertising with the data they collect on customers using their service. Where Apple’s business model does not depend on using customer data collection to sell advertising, it is necessary for their model to make products and services that delight their customers. Within this viewpoint, Apple is already a trusted entity with our privacy since their business model does not necessitate mining that personal information. Based on some recent research we did, Apple customers overwhelmingly listed Apple as the top company they trusted with their privacy over companies like Microsoft, Google, Amazon, Samsung, Facebook, etc.

However, getting useful and good behavioral data is essential for Apple to make better products and services and, more importantly, compete with those services down the road. I’d almost prefer that, instead of Apple’s stance being not only to collect as little data as necessary and also to universally anonymize that data, they would simply say, “Trust us with your data. We will keep it safe and secure and we will deliver you superior products and services because of it.” I could also be satisfied with a hybrid approach where, for the most security conscious customers, Apple gives them the option to keep the existing privacy protocol as well as their differential privacy techniques, but also allow others to opt-in to giving them more data so that things like Siri, News, Apple Music, etc., benefit from that data and thus, deliver those customers a much more personalized and useful service. With some of the recent changes in iOS 10.3, I feel they are getting closer to exactly this scenario.

My genuine concern with Apple solely relying on an “above and beyond” approach to consumer privacy is we don’t know yet if this process will work and the existing evidence causes a great amount of speculation. My concern is they are mortgaging their future competitiveness around things like AI and better services holistically with this stance. Thus I view it as somewhat risky even if it seems like the right thing to do. If their approach does not work and their services truly not compete, some of their customers may use solutions from competitors whose business models open the door for them to be irresponsible with our data. If that happens, the customers lose because Apple — and I include Microsoft in this statement — have the least motivation to be irresponsible with our privacy. Their business models do not depend on directly monetizing that data. Say Google becomes the AI agent of the future and, all of a sudden, they fall on hard times and the only way to right the ship is to compromise or alter their privacy stance to keep making money. While it is only a hypothetical, it is still a valid concern if a free service monetized by ads becomes the majority services monopoly in the future.

I truly hope Apple is continuing to take a hard look at how their services compete in the market against comparable ones. Should there need to be some pivots on how data is collected and used to compete, I think the market would be OK with that. They are no doubt doing the right thing for their customers but, if going above and beyond with differential privacy yields non-competitive and thus less relevant services, then it will be all for nothing if their services aren’t used and can’t protect their customers.

The Unintended Consequences of a Single Design Decision

Being involved in the design and development of consumer products, I’ve seen how a single design decision can have huge unintended consequences and change an entire industry — for the better or the worse.

As a positive example, when Apple decided to design notebooks using aluminum housings and abandon the industry’s use of plastic with ugly vents and screws, they created a huge industry of automated machining of solid aluminum blocks. That industry has now made it possible for other notebooks to use the same processes to create their own products.

Another example is when Apple decided that thinness was a major goal for its mobile products. The unintended consequences have had a huge impact, likely beyond the original intention, but one that’s impacted performance, features, user satisfaction, and the entire industry.

Some of those consequences are:

Shorter battery life – Making phones and notebooks as thin as possible and then making them even thinner in each subsequent generation resulted in less volume for batteries. But because the one dimension that reduces a battery’s capacity most is its thickness, battery life of iPhones and MacBooks have suffered. Battery life of iPhones and the latest line of MacBook Pros are well below expectations and are one of the major user complaints. So much so, the battery indicator no longer displays time left. And, since a battery’s life is based on the number of charging cycles, smaller batteries need more recharging cycles, resulting in a shorter life.

Fragility – The thinness of iPhones has resulted with the iPhone 6 and 6 Plus actually bending in normal use and the need for protective cases. Samsung has shown, with their Galaxy S7 Active, that a phone can be made with a rugged, waterproof enclosure that’s only a few millimeters thicker. Speaking of Samsung, there’s even speculation that their problem with the Note 7 phone catching on fire was a result of trying to beat Apple in the thinness competition.

Reduced number of ports – With thinness comes the need to remove many of the legacy ports designed for thicker products. While leaving them out makes it possible to reduce thickness, it requires carrying more dongles to connect to our other devices.

Loss of features – iPhones still don’t have NFC and wireless charging, likely a result of insufficient space. Magsafe, one of the most innovative features ever created for notebook computers, has been eliminated to make the new MacBook notebooks thinner. With its removal is the loss of the battery charging indicator.

Typing errors – Thinness has led to notebook keyboards with reduced performance compared to the iconic keyboards used in products like the ThinkPad. Key travel has gone from 3 mm to under 1 mm, causing more errors.

What’s ironic is these consequences might have just resulted from an Apple executive saying. “I want our products to be as thin as they can be”, walking away, and then everyone taking the person literally. How likely is it that, when that request was made, anyone was thinking of any adverse outcomes? Well, perhaps a few engineers that were told not to be negative and be a team player.

The lesson is that an arbitrary goal for a product’s requirement can have far-reaching effects on the company’s products, as well as an entire industry, and few may be aware of that when it all began.

What Apple’s Acquisitions in 2016 Tell Us about 2017 and Beyond

There is a lot of speculation about the “iPhone 8” and what Apple should be focusing on in 2017 in order to stay ahead of the game or, for some, barely keep up with competition. Despite some safe bets on the new iPhone features that can be extrapolated from supply-chain clues, guessing, even correctly, what Apple will do is almost as unlikely as winning the lottery. I thought, however, that looking at the 2016 acquisitions would give us more than a clue as to where Apple will focus in the future and I share my wish list of what I would like to see come out of Cupertino.

What Apple Acquired in 2016 (that we know of)

Emotient is a startup that uses artificial-intelligence technology to decipher people’s emotions by analyzing their facial expressions. The technology can be used for a number of things including detecting pain, reading reactions to content or situations we are exposed to – think advertising and retail. Emotient had been granted a patent for a method of collecting and labeling as many as 100,000 facial images a day that can be used to teach computers to better recognize facial expressions.

LearnSprout is a San Francisco-based startup focusing on tools that help teachers monitor students’ attendance, grades, and other school activities through easier access to school information systems. One of the purposes of collecting such information and making it available to teachers was to help identify at-risk students.

Flyby Media is a company that worked with Google on Project Tango. Flyby Media developed technology that allows mobile phones to see and scan, through the camera, the world around them. The company’s website also said they were developing the next generation of consumer mobile-social applications that connect the physical and the digital worlds.

LegbaCore is a firmware security company that specializes in “digital voodoo” or security at the deepest and darkest levels of computer systems. Apple was first exposed to them as they were battling Thunderstrike 2, the first super-worm to successfully attack Macs.

Carpool Karaoke is a popular show Apple licensed 16 episodes of and is to be produced (but not hosted) by James Corden as well as Ben Winston, the “Late Late Show’ executive producer. Tim Cook and Corden kicked off Apple’s September event with a special edition of Carpool Karaoke.

Turi is a machine learning and artificial intelligence startup focused on tools that help enterprises make better sense of data. Turi also enables developers to build apps with machine learning and artificial intelligence capabilities that automatically scale and tune.

Gliimpse is a Silicon Valley-based company that built a personal health data platform that enables any American to collect, personalize, and share a picture of their health data. The focus was particularly around cancer and diabetes patients.

Tuplejump is an Indian-based machine learning company specializing in software that processes and analyzes big sets of data quickly. is a Finnish company focusing on indoor location and mapping.

Acquisitions Show Clear Areas of Focus but How It Will Materialize is Still Unclear

If you look at the list above, aside from the clear outlier of Carpool Karaoke, the focus for Apple seems centered around artificial intelligence, augmented reality, enterprise and education.

Artificial intelligence is probably the best example of how different the expectations vs. what Apple delivers might be. For many, artificial intelligence simply boils down to how smart Siri is. However, intelligence in devices is expressed in many different ways. Learning which color emoji is your preference, learning your most likely route at a given time of the day, understanding a reference to a time and a place in an email and setting up an appointment for you are all examples of how “intelligence” can be used to make our experiences better.

Machine learning and fast data processing are key to feeding the brain of any artificial intelligence. Analyzing millions of data points to discover patterns that can help predictability is very important in lowering response times and increase accuracy in our exchanges with an assistant like Siri. Being able to detect users emotions might play a role in that interaction. For the assistant to know if we are getting frustrated or anxious might help with our interaction in the same way it would between two humans.

Augmented reality is an area in which Tim Cook has expressed interest and excitement. Aside from gaming which, of course, is a big part of what iPhones are used for, there are commercial experiences that could benefit from an augmented reality, mixed reality, merged reality or whatever else you want to call this blend of real and digital worlds.

Enterprise is becoming more and more important for Apple and security plays a big role in selling devices to enterprise. iPhones and iPads continue to penetrate organizations, becoming more of a target for hackers. Apple needs to stay ahead of the game. While consumers might not always recognize how important security is, Apple has been very passionate about security for quite some time. As we use our devices, not just to store pictures and contacts info but payment information, health information, smart home connections, we want our devices, as well as our data, to not to be accessible to people with bad intentions.

In education, the battle to displace Chromebooks in K-12 will intensify in 2017, with Microsoft eyeing that segment as a growth opportunity for Windows. For Apple not to have iPads forced to compete on price alone but in adding value to their offering beyond devices is important. Looking at applications and tools to educate as well as manage students is certainly a way to do that.

My Wish List for 2017

Considering the areas I have discussed above, there are a few things I would like to see Apple focusing on in 2017.

A More Conversational Siri – I have mentioned before how my relationship with Siri has been improving over time. This is good and bad at the same time. Good because I appreciate it. Bad because I want more. As my dependence on Siri grows, first in my car and then everywhere through my AirPods, I want Siri to rely less on my iPhone screen and become more conversational. Apple understands that less time looking at my screen does not mean I will think any less of my iPhone but I realize that, for conversational AI, the progress will be slow.

More Tools for Education – Swift Playgrounds was a great example of how Apple could do more to future proof our kids with the kind of skills they will need when they grow up. AI is here to stay and, instead of worrying about the threat of job losses, we should be investing in preparing the next generation with the set of skills required to get a job. While this is a much bigger issue than any single company could solve, I think Apple is in a good place to get kids engaged at an early age, not just with coding and problem-solving skills, but also with fostering creativity, imagination, and innovation.

Better Collaboration Tools – Collaboration is broader than just working with someone else. While I would like to see Apple focus on better collaboration tools for work, it is at home I more urgently need help. If you have kids, you know running a home is as complex as running a company. School and after-school activities, and work all blend together to create a scheduling nightmare only resolved with great collaboration skills.

More than any other company, Apple owns households and I would like to see more apps and tools to help households come together; not just for scheduling but also for monitoring and sharing. Without wanting Apple to give me whatever the digital equivalent of my daughter’s journal key is, I want to make sure my daughter is safe when she is online. Of course, teaching her how to do so is the first thing but there are more steps Apple could take to provide increased safety without hindering the experience. I am hoping machine learning will help with creating a more proactive approach to online safety as whitelisting websites, which is currently what most solutions boil down to, does not make for a rich experience. Sharing not just content but access to our smart homes across devices and family members could also be improved. Helping make our home life easier will pay dividends, especially at a time when the fight to own our home is intensifying among digital assistants. While having an assistant that connects with many smart home devices is valuable, having one that does not let me forget to pick up my kid from karate is priceless.

The Devil Is in The Detail

As you can see, my list is not about iPhone features and sexy new technologies. It is about practical experiences that improve my everyday life, something Apple has done for a long time. Something, however, that is hard to see when you first buy a product and something that is hard to market at point of sale. The challenge for Apple will be to continue to stay focus on delivering better experiences, rather than getting distracted by proving they can innovate by delivering sexy gadgets.

Thinking about Apple’s Next New Product Category

Many tech news publications do “year in review” and preview pieces at this time of year. One of the questions I always get asked is what new hardware products Apple might launch in the coming year. Some things – notably the iPhone – are so predictable in their annual schedule at this point they’re barely worth commenting on, while others like the iPad and Apple Watch seem to be settling into something of a pattern too. The most interesting question is often what completely new products Apple might release. With that in mind, here are some thoughts about the new products I think we might see from Apple over not just the next year but the next couple of years.

Additional wearables

I love my Apple Watch – I’ve used one version or another all day, every day, since it first came out. It’s made a meaningful difference in my ability to manage incoming notifications, my health, and my general information consumption. Over the past week, I’ve also been using AirPods a lot and those too are, for the most part, great little devices. However, there are some limitations to both of these products which make me think we might see additional wearables from Apple.

One of the biggest limitations of the Apple Watch now that it’s usable in the pool and has GPS functionality, it’s not appropriate to be worn during certain sporting activities. If you play basketball, soccer, football, lacrosse, or any other contact sport, wearing a watch (of any kind) would be either unwise or dangerous for the watch and player safety. If you get a lot of your exercise through these sports, the calories you burn and time spent exercising can’t be captured by the Watch and, therefore, simply go unrecognized by the Activity app. In the past, I’ve used Fitbit devices which I could slip into a pocket while playing and would track such activity for me. So one obvious device for Apple to launch is a companion of sorts to the Watch which would clip onto clothing or slide into a pocket in order to track such activity, syncing with the Apple Watch when you put it back on.

Others might prefer to have just one of these devices instead of a Watch, if they have never worn a watch of any kind – whether or not someone has traditionally worn a watch seems to be one of the biggest predictors of how they respond to the Apple Watch, in my experience. Some other device worn on the body to track activity and potentially buzz for notifications might be an interesting alternative. If it also came with audio controls as a companion to AirPods, that would make it particularly interesting – I’m finding that using Siri to control playback isn’t always the best fit.

Siri speakers

In my experience, the biggest advantage home speakers like Amazon’s Echo or Google’s Home have over Siri on any of the devices where it’s available isn’t functionality of the assistant itself but the size and configuration of the devices on which it operates. Those devices were, without exception, designed first and foremost with something other than microphone performance in mind. They’re mostly intended to be as small as possible, with smooth lines, large displays, and other features which hampers the ability to deliver high-performing far-field voice recognition. As such, if Apple really wants to improve Siri performance, especially in the home, the solution probably isn’t in software but in hardware and that’s where a Siri speaker comes in.

The next question is exactly what such a speaker would involve. Echo and Home are both very similar speakers, but they’re standalone – other than the mobile app used to set them up, they connect to WiFi in the home and operate independently. Google Home does work with Google Cast but, other than that, it is essentially disconnected from any other device in the home. It feels like an Apple home speaker would be more integrated into the ecosystem of devices in the home, becoming one of several outputs for audio, for example, and potentially working together with the Apple TV and/or other devices for whole-home audio. One can also imagine using Siri on phones to trigger music playing on the speaker, for example. Or even using the Siri speaker to trigger playing a TV show on the Apple TV for a child in the other room. I can also imagine using several of these speakers independently to recreate a sort of Sonos whole-home audio system.

HomeKit hardware

Another interesting category is first-party HomeKit hardware. To be honest, I think this category was more likely a year ago, when HomeKit was still struggling to get off the ground, versus today’s much healthier ecosystem. But I still think it’s possible Apple might eventually introduce its own hardware to work as part of the HomeKit system, especially in categories where design and ease of use on third party devices is poor or in areas where the devices would make a meaningful contribution to other aspects of the Apple ecosystem. For example, sensors placed around the home could help trigger lighting and other home automation features through HomeKit.

Having said all this, I continue to believe the smart home space is essentially stuck at the early adopter phase when it comes to these one-off purchases as opposed to managed services. With that in mind, it’s harder to see how Apple could launch products in this category and have a really significant impact on the market unless it also provides some kind of installation and management support. That would obviously be a departure for Apple, whose premise for much of its hardware has always been it just works. But smart home gear is inherently different in nature from standalone hardware products because it needs to be integrated into the home. That means dealing with wiring and other potentially dangerous and intimidating challenges that don’t apply when it comes to phones or laptops.

Augmented reality

Tim Cook has made increasingly enthusiastic remarks about augmented reality over the last couple of years and it seems likely Apple has some kind of play in AR up its sleeve. However, the biggest question is whether it sees the iPhone or some other device as the center of these experiences. We’ve already seen some basic AR features as part of iPhone apps, from an early version of Yelp which superimposed locations of restaurants on a live view of the environment to the more sophisticated merging of the real and virtual worlds in the Pokemon Go app. With dual cameras and the ability to sense depth, the iPhone is certainly capable of more sophisticated augmented reality applications than ever before.

But there are still some categories of augmented reality where a head-mounted device of some kind can provide more advanced functionality and, critically, free your hands to interact with the environment. This could certainly be used for gaming but also be used for educational and other scenarios, too. Apple is reportedly working on at least some head-worn AR devices, though we don’t know yet whether any of these will make it to market. However, it feels like 2017 could well be the year where we see the first mass-market AR devices launch, testing the market for such devices and potentially laying the groundwork for an Apple entry later.


If I had to guess, I’d say the Siri speaker and additional wearables are the most likely entrants in 2017, while AR feels at least a year or two away. I’m still not 100% convinced Apple should be in the first party home automation hardware business at all. And of course, I’ve said nothing about cars, which seem less likely as a future hardware category today than they did this time last year and, at any rate, would be multiple years away. It’s entirely possible we won’t see a major new hardware product category from Apple at all in 2017 but I suspect we’ll see at least one at some point.

Apple AirPods: More than just Headphones

Prior to their going on sale, we had quite a bit of information about the AirPods and what they were capable of doing. We knew they would pair easily and that there were sensors built in that knew when you are wearing them and when you weren’t. But some things just have to be experienced to appreciate their magic and the AirPods are one of them.

First, you will never see a more seamless pairing experience than the first time you pair the AirPods. Open the case, press Connect, and they are instantly paired with all my iOS devices, including iPad and Apple Watch. As soon as you put one AirPod in your ear, subtle sound lets you know they are on and ready to be used.

Perhaps my favorite feature is when you take one AirPod out, the music automatically pauses. Put it back in and it resumes flawlessly. This is useful when someone is talking to you and you need an ear free to listen and respond. I have some context with this experience, having used the Plantronics BackBeats Pro 2 which offer a similar smart sensor that pauses your music when you take off the headphones. For whatever reason, I found taking one AirPod out much more convenient than lifting the entire headset off my head. Perhaps just preference, perhaps not. In either case, the seamlessness of this experience is fantastic.

Whenever you need to know the battery level of the AirPods or the charging case, simply open the case next to your iPhone and this screen instantly pops up. Apple is using some sort of close proximity solution because, if you move the case even one foot away and open it, nothing happens on the phone.


I’ve been using Bluetooth headphones for years, so the awesomeness that is wireless headphones was not new to me. But, these were the first I’d used which are independently wireless — not connected to anything. With sports Bluetooth headphones you notice and feel the wire on the back of your neck as you move. Similarly, with over the hear wireless headphones like the Bose QuietComfort or Beats Wireless or similar ones, you feel the band that goes over the top of your head. The point is, they don’t disappear. I was surprised and delighted by how comfortable the AirPods are in my ears and how easily you forget they are there. Interestingly, I feel the same way about my Apple Watch. It seems the theme with both of Apple’s wearable computers (and yes I consider the AirPods to be wearable computers) is comfort to the degree of making them feel as though they disappear. This may be ear-shape dependent so my statement may not be true of everyone but it is with me.

Many others who have tried them have commented on how well they stay in your ears. I found this to be true. I used them while doing light exercises like yoga and even some living room cardio (via the Apple TV app Zova) and they stayed in perfectly. The lack of a cable makes a difference in helping them stay in your ears. I took it one step further and played a singles tennis match with my playing partner. I’m sure Apple wouldn’t recommend them for an intense run or similar activity, but I figured I’d try it. I’ve tried every form of sport Bluetooth headphones and, because of the wire behind my neck and some of the violent movements of tennis, they all fall out regularly. Here again, not having the wires attached made all the difference in the world. Maybe the AirPod shape fits my ears like a glove but they didn’t fall out one time during my match. In case it matters, I’m a fairly high level (by USTA ranking) tennis player, so I go at it pretty hard.

When I was tweeting my thoughts about AirPods, I got resistance from some saying, “Aren’t they just wireless headphones?” Apple’s AirPods are just wireless headphones about as much as the Apple Watch is “just” a watch and iPhone is “just” a phone. Nothing makes this more apparent than the Siri experience.

Siri in Your Ear
It is remarkable how much better Apple’s Siri experience is with AirPods. In part because the microphones are much closer to your mouth and, therefore, Siri can more clearly hear and understand you. I’m not sure how many people realize how many Siri failures have to do the distance you are from your iPhone or iPad, as well as ambient background noise and the device’s ability to clearly hear you. Thanks to the beam forming mics and some bone conduction technology, Siri with the AirPods is about as accurate a Siri experience I’ve had. In fact, in the five days I’ve been using the AirPods extensively, I have yet to have Siri not understand my request. Going further, the noise canceling built into the AirPods is impressive as well. I’ve intentionally created noisy environments to test the AirPods and Siri to see how it handles loud situations. Perhaps the most intense was when I turned my home theater system to nearly its peak volume, blasted Metallica and activated Siri. Remarkably, it caught every word and processed my request.

Furthermore, having Siri right in your ear and available with just a double tap on the side of either AirPod profoundly changes the experience. In many ways, the AirPods deliver on the voice-first interface in the ways I’ve been impressed with Amazon’s Alexa.

There is something to not having to look at a screen to interact with a computer, especially in a totally hands-free fashion. The AirPods bring about an experience which feels like Siri has been set free from the iPhone. This was Something that enhanced the experience but also pointed out some holes I hope Apple addresses.

Voice-First vs. Voice-Only Interfaces
There is, however, an important distinction to be made where I believe the Amazon Echo shows us a bit more of the voice-only interface and where I’d like to see Apple take Siri when it is embedded in devices without a screen, like the AirPods. You very quickly realize, the more you use Siri with the AirPods, how much the experience today assumes you have a screen in front of you. For example, if I use the AirPods to activate Siri and say, “What’s the latest news?” Siri will fetch the news then say, “Here is some news — take a look.” The experience assumes I want to use my screen (or it at least assumes I have a screen near me to look at) to read the news. Whereas, the Amazon Echo and Google Home just start reading the latest news headlines and tidbits. Similarly, when I activate Siri on the AirPods and say, “Play Christmas music”, the query processes and then plays. Where with the Echo, the same request yields Alexa to say, “OK, playing Christmas music from top 50 Christmas songs.” When you aren’t looking at a screen, the feedback is important. If I was to ask that same request while I was looking at my iPhone, you realize, as Siri processes the request, it says, “OK” on the screen but not in my ear. In voice-only interfaces, we need and want feedback that the request is happening or has been acknowledged.

Again, having Siri in your ear and the ability to have a relatively hands-free and screen-free experience broke down when you asked Siri something which required unlocking your phone. For example, one of the most common Siri actions of mine is to use Siri to locate a family member. Particularly my daughter who takes a bus home from school that has a variable drop off time due to traffic or student tardiness. Nearly every day I ask Siri to locate my daughter. But, when I do so via the AirPods and my phone has been off long enough to lock, it says I need to unlock my iPhone first. I hit this wall due to Apple’s security protocols, which I appreciate greatly. I wonder if, in the future, we can have a biosensor in the AirPods which authenticates with me and thus gives me security clearance to process a secure request like reading email, checking on a family member or other sensitive requests, without having to unlock the phone first.

There were cases where Siri assumes I can look at my iPhone to deliver the request. There are certainly plenty of queries where Siri, in a voice-only experience, works — when you ask Siri to read your new emails, or set timers, appointments, ask what time a sports game is, etc., but the sweet spot here will be when you can thoroughly use Siri and not need any screen for the full experience. I’m confident Apple will increasingly go in this direction.

Creating the Siri experience to be more than just voice-first but voice-only will be an important exercise. I strongly believe that, when voice exists on a computer with a screen, it will never be the primary interaction input with that screen. Take the screen away and things start to get really interesting. This is when new behaviors and new interactions with computers take place and it’s what happens when you start to integrate the Amazon Echo or Google Home into your life as both are voice-first experiences.

Looking Ahead
There is a great deal to like about the AirPods. Those who buy them and use them will be pleasantly surprised and delighted by their performance as wireless headphones and impressed with the upside of Siri in your ear. I consider the AirPods an important new product in Apple’s lineup and in the same category as the Apple Watch regarding importance for the future. Here is a significant observation of both the Apple Watch and the AirPods worth pointing out. Apple has a tendency to push engineering limits at times to learn or perfect a technique they believe is important for the future or to learn from it in order to integrate into other products. While iPads and iPhones are getting larger, the Apple Watch and AirPods are pushing the limits of miniaturization. Something that is key when we start thinking about future wearables where companies will pack tremendous amounts of technology into extremely small objects. The exercise of packing sensors, microprocessors, batteries, and more into extremely small objects and manufacturing them at scale is an incredibly important skill set to develop for the future. Both the Apple Watch and AirPods are key engineering milestones to build on for where I believe Apple is headed in the future.

Sleeping with the Enemy Would Benefit Both Microsoft & Apple

Because of what I do, I try different devices all the time. While I have used Windows 10 PCs since they became available, I never made one my main working device. For the past nine years, my main PC has been a Mac with the 12” MacBook as my latest device. Last week, I received a Surface Book with Performance Base and, after setting it up, I decided to try and make the switch.

I was particularly interested in understanding how, as a user, I could continue to benefit from the Apple ecosystem even if I did not have a Mac. Also, what is the opportunity Microsoft has to deliver the best Windows 10 + iOS experience. This is important because there are more iOS users with a PC than there are iOS users with a Mac. So it offers an opportunity for both companies to improve the cross-platform experience. While there might be an opportunity for Apple to convert a few of those PC users, the great majority are comfortable right where they are. Offering an easier cross-platform experience between iOS and Windows 10 as a differentiator for Surface would clearly benefit Microsoft.

Hardware and Windows 10 are the Easy Part

As I prepared to transition to Surface Book, there were specific aspects of my workflow I needed to address.

The hardware was not a problem. I love the keypad. I spend a lot of my day typing and I was not a fan of the keypad on the 12” MacBook. Typing on the Surface Book is extremely rewarding. The mousepad is a little more sensitive than the one on the MacBook but it did not take long to get used to it. The Surface Book’s fan kicks in often and it is quite loud which was a bit of a distraction at first. The quality of the screen is great but I did not find myself touching it very much other than with the pen to write quick notes.

I am not new to Windows 10 so transitioning was not an issue. The most annoying thing was trying to paste using the equivalent of Command-V which obviously did not work. Mac users are very different and many use their systems in a much deeper way than I do so I do not intend to speak for them. If you already use Office on the Mac, your transition will be much easier. If your documents are all in iCloud, your transition will also be easier. When I joined Creative Strategies back in April, I moved to the cloud and my multi-device life became so much smoother. Once I got on the OS X Sierra Beta, things got even better as all the files I am working on are saved to the iCloud Desktop automatically, making my ‘grab and go’ routine more accessible. Something else that changed back in April is I now only travel with my 9.7” iPad Pro. Not having to think if I have all the files I need was extremely liberating. I downloaded iCloud for Windows on my Surface Book and all my work was easily accessed. Pages, Numbers, and Keynote were also fine to use although Numbers documents missed a few functionalities and Keynote presentations had some font issues.

While the files were not an issue, remembering all the passwords for all the websites I use certainly was annoying but, of course, that is something you only do once.

I was concerned about my Apple Watch not being able to unlock my PC but Windows Hello on Surface Book was seamless. I sat down at my desk and the Surface Book was unlocked. It felt like there was no password set up in the first place.

What it All Boils Down to: iMessage and Apps

In the end, what I really struggled with were two things that had nothing to do with the OS per se or the physical device.

I use iMessage a lot during my day and, while my iPhone is always next to me, I have become accustomed to using it on my Mac. I do this because it is more convenient using a full keyboard to type but mostly because it feels more part of whatever I am doing. It remains more central to my workflow rather than a side conversation on the phone.

The other big part of my day is Twitter and the client on Windows is just painful. I asked input from my followers but the sad answer was a validation of my pain. Using Tweetdeck over the browser was far from perfect as, more often than not, I would accidentally close the window. So, as with iMessage, I resorted to having my iPad open next to the Surface Book which really impacted my workflow.

iMessage for Windows

Why does Apple do that, you ask? Because it cements iOS users even more into iMessage vs. having them look for other apps that could have them disengage from iOS. I am not advocating Apple replicate all the features iMessage has on iPhone. There are features that are not unique. So, for instance, keep invisible ink for iPhone and allow stickers. Apple has much to gain here, contrary to what it would be if it put iMessage on Android. iMessage for Windows is about recognizing not all their iOS users will be Mac users and allowing them to still get the best experience from iOS. Opening iMessage to Android will not really do much as far as driving churn and there are plenty of other apps that go cross-platform in phones that leave users with plenty of choice.

With Windows launching People with third party app plugins, it would be a perfect time for iMessage to be included.

More App investment

Microsoft has options to both improve Windows and differentiate Surface. There are steps Microsoft can take in engaging with developers more to get apps to Windows. Even without a phone business to worry about, the Windows 10 environment is behind. There are two sides of this equation. One speaks to the creators Microsoft is focusing on for the next software update and one speaks to consumers who are still very engaged with their PCs and, therefore, want a rich experience. With Apple’s new MacBook Pro on the market and the eagerness to prove the Touch Bar is the right approach for touch on a Mac, I expect Apple to make developer engagement a top priority. Microsoft needs to do the same for the platform but also should step up efforts in first party apps both for Windows and Surface. So, if Twitter is not interested in improving its app, why is Microsoft not building one?

There are other things the Windows Devices team could do for Surface like creating apps that help with content transfer for those people who are not already in the cloud.

Think Beyond Devices and Platform

What my experience made crystal clear is both Apple and Microsoft need to think beyond devices and the OS and think about the whole ecosystem and their ultimate goals.

If Apple is serious about shifting more revenue to services, why not take Apple Music out of iTunes and make is a standalone app? I have not used iTunes in years as, whenever I get a new device, all my backups are in the cloud. Having to use iTunes to play my music on a Mac or download iTunes to the Surface Book seems a very unnecessary step. While I am sure people still buy music, I would bet they are less likely to do it if they subscribe to Apple Music. Even if they did, a simple link to the store would be all they need.

For Microsoft, it is about recognizing that, whether in the consumer space or the enterprise one, Surface buyers are more likely than not to have an iPhone and be entrenched into iOS. Embracing what they are attached to, rather than forcing them to use other tools, would benefit engagement (although it might not benefit a specific service). One Drive is a good example. While it was possible for me to access iCloud, there were more steps to take when wanting to save documents as the default was either One Drive or DropBox.

Together Against Google

Both companies need to also realize facilitating this Windows + iOS world will help limit the risk of Google taking advantage of the weaknesses and grabbing users. Again, this is not about devices. I do not expect Google to win consumers and enterprises with Chromebooks and Android tablets. This is about the much bigger battles: Digital Assistants and AI. Google has always been very good at using its device-agnostic approach to its advantage. Google Maps, Google Photos and now Allo are great examples of the extent Google goes to make sure it reaches valuable customers on other platforms. It is about time Apple and Microsoft started to play the same game.

The MacBook Pro and Touch Bar Experience

The Big Upgrade
Arguably, the new MacBook Pros are a noticeable boost for those who need to upgrade their Mac. My MacBook Pro is a 2012 and, while it works fine for most tasks, was starting to show its age in many ways. I’ve been using the new 15” MacBook Pro with the Touch Bar. When I first saw the screen, I felt like it was larger than my older 15” MacBook Pro — in part, due to the screen resolution but also the slightly smaller bezels on the left, right, and bottom. The new MacBook Pros are also noticeably thinner and more compact than the previous designs. The battery life, even for a pro machine, is similar to that of the MacBook Air even iPad Pro for continual use, both which get a solid full day 8+ hours of working computing time on a single charge. Lastly, the keyboard is one of my favorite features. I’m picky when it comes to typing because I am a touch typist. I write more than 5,000 words a week and how the keyboard feels is crucial to me. To be honest, I did not like the keyboard on the original MacBooks but the second generation butterfly mechanism is dramatically improved in my opinion, and I love not just the feel but the sound.

The Touch Bar
Let’s talk about the Touch Bar. Without question, the Touch Bar is an enormous feature upgrade from physical function keys. What was once a static and fixed 13 button function key space has become an infinite set of dynamic possibilities once the row of keys is displaced by a strip of glass and clever software. After just a few minutes of using it, you quickly wonder why this had not been done ages ago.

That being said, there is a learning curve. The Touch Bar represents a dynamic shift in workflow. You have to begin the journey of discovery to understand all that it can do. This learning curve is short but, since the Touch Bar is capable of so much, I found myself experimenting quickly with all it could do to understand how to use it to enhance my work.

One of the things that stood out quickly was how many actions the Touch Bar could absorb that usually required more work or Track Pad swipes. In fact, there are many times where you can see an application smartly take advantage of the Touch Bar and dramatically limit, if not eliminate, the need to use the Track Pad for many tasks. The power of the Touch Bar is in its ability to contextually understand what you are doing, or the app you are in and offer up the most common buttons or menu items. For example, while writing this post, common text formatting options are right above my fingers, instead of off to the side or on top of the application window.


In this use case, formatting text still requires the Track Pad to select the text elements I want to format. But having the Touch Bar display the likely formatting actions is faster and more efficient — tap, select the text, then move the mouse over to the menu to the right or top of the screen to select my formatting option. I know this seems like a simple use case, but the efficiency of doing it this way is quite an improvement in workflow. This is particularly true in areas where options may be several layers deep in a menu. Actions like these highlight how much efficiency the Touch Bar adds to workflows when the software, or the user, customizes it to take advantage of the dynamic capabilities it offers.

After the experimentation stage where you spend time trying out and learning all the things it can do, there comes the new habits or new workflow phase. I’ve already found some use cases where my default behavior is tapping the Touch Bar for actions vs. using the Track Pad. A simple example of this is with Safari. I now use the Touch Bar exclusively to switch or open tabs, search the web, etc. Again, this seems simple, and it is but, regarding speed and efficiency related to the action you want to do, it is actually quite efficient.

Perhaps the best way to think about this, from a workflow perspective, is finger travel vs. mouse/trackpad travel. To accomplish some of the simple use cases I mentioned above — text formatting, selecting the text, scrolling over to the menu item on the top of the screen to select an option, scrolling to the menu on the right of the screen to further format — requires quite a bit of mouse travel up, down, left and right. The Touch Bar removes many use cases where the mouse has to travel distances on the screen and can be done with only slight travel of the fingers up to the Touch Bar. In all these experiences, the amount of time it takes to accomplish the task is less, thus making for more efficient workflows due to less travel of the hands or mouse.

Having used the iPad Pro as a primary computer for extensive lengths of time, as well as many Windows-based touchscreen PCs, the similar workflow benefits reveal themselves once you limit how much you need to use the mouse for scrolling or selecting. The speed to tap is often faster than the time it takes to move a cursor. The difference here, between a touch screen workflow and a Touch Bar workflow, is fundamentally limiting how far your fingers or hands need to go. This is why I believe Apple is holding to their philosophical viewpoint of not adding a touch screen to the Mac to limit the amount of travel that fingers, hands, or arms need to do to complete a task. Apple is focusing on keeping the action where the fingers are and limiting the amount of movement and time it requires to complete steps in your workflow.

To Touch Bar or Not
I started this piece saying the MacBook Pros are a big upgrade in many ways over their older designs for the display, speed and performance gains, more compact industrial design, and all the added perks and features a new machine brings. According to our internal Creative Strategies research, approximately 19% of Mac owners have a Mac that is five years old or older. This compares to roughly 21% of consumers with Windows PCs 5 years or older. There are undoubtedly many people in need of an upgrade and, for them, the new MacBooks are a solid one to consider. The question remains whether those folks spend the extra money to get a Touch Bar or non-Touch Bar version of the new MacBook Pros. Given the incremental price difference, I imagine this question is top of mind. Here is how I’d think about it.

From my experience, the Touch Bar adds significant value regarding efficiency and workflow, given how dynamic and predictive it can be. But, to truly make a case for this feature, you have to be willing to bet on Apple’s third party software development community optimizing their Mac-based apps, or creating new ones, to benefit from this feature. If you are willing to bet Mac software developers will take advantage of the Touch Bar, then I wouldn’t hesitate on spending the extra money. There are so many unique opportunities for software developers to make it faster and easier for their customers to get work done by integrating the Touch Bar into their software. I’ve already experienced this with Apple’s first-party software, and I’m excited to see what third parties do with the Touch Bar. It’s one of those features that, once you start using it, you want to use it with all your Mac software — but we just aren’t there yet. Many developers, like Microsoft and Adobe and others, have already committed to releasing updates which take advantage of the Touch Bar so clearly there will be apps beyond Apple’s. This is an experience that will only get better as software developers step up to the opportunity and create new experiences.

It will be interesting to see how Apple moves the Touch Bar forward as well. Given the predictive and on device machine learning features Apple integrates into iOS, so the software adapts and conforms to your unique needs, it is possible they apply this same approach to the Touch Bar. Perhaps, over time, macOS can learn my core behaviors and most common tasks and workflows and begin to have the Touch Bar adapt and become even more predictive and proactive in offering me the kind of software buttons or menu items I need in the context of my work. Right now, the developer is in control of applying the right contextual buttons to the Touch Bar, or the user does it through full customization. It will be interesting, in the future, if a form of artificial intelligence can play a larger role in showing me Touch Bar options when I need them based on my unique workflows.

Touch Bar vs. Touch Screen
Inevitably, any element of this discussion will shift to the difference in philosophy between Microsoft with Windows and touchscreen-based notebooks and desktops and Apple’s philosophy with touch-screen tablet computers and Touch Bar-based notebooks. Ultimately, in my opinion, the fact there are so many options is what matters and what is exciting. These companies are showcasing their best attempts to help you get more out of your computer and do your job more efficiently and more productively. What consumers need to decide is which style is best for them and their workflow.

In both the case of the Touch Bar and touch screen PCs, what matters is not the philosophical differences but what software developers do to leverage the unique hardware that will be on the market from Apple and Microsoft’s partners. A lot of jobs exist in the world that need something more than a smartphone or a tablet and, for those folks, they have more choices than ever to help them get their job done.

Apple’s Newest Product: Used iPhones

Apple this week started selling refurbished iPhones in the United States through Of course, wireless customers have long had the opportunity to buy used iPhones (and other brands) from their carriers and other retailers and online sellers. However, the fact Apple is now offering the devices direct (along with long-available refurbished products such as Macs, iPads, and iPods) is notable. It reflects both the maturing nature of the market and Apple’s desire to put the iPhone into the hands of more budget-constrained smartphone buyers while still making enviable margins.

The Collapse of Subsidy Models

Just a few years ago, the U.S. smartphone market was almost entirely subsidy driven, which meant few people actually knew how much a smartphone cost. What they knew was, roughly every two years, they could pay $200 to their carrier and get a new smartphone. When U.S. carriers began to move away from the subsidy model, many people were shocked to realize that they were paying upwards of $600 or $700 over the lifetime of that phone. As that realization took hold, the market began to bring forward a long list of new financing options.

Today, buying a smartphone is a lot like buying a car. If you’ve got the cash, you can pay for the whole thing upfront or you can pay through an installment plan (essentially a loan) or you can sign up for something very akin to a car lease in which you pay a monthly fee and get a new phone roughly every year. All of the plans effectively shift the cost of buying a new phone around but none really help lower the cost. That’s why the refurbished market is important. While there are fewer options when purchasing a refurbished phone (you typically pay all up front), the savings can be substantial.

Certified Pre-Owned Luxury Phones

Back in September 2015, Apple launched its own iPhone Upgrade Plan along with its iPhone 6S lineup, directly competing with its carrier partners. Apple customers could pay a monthly fee (starting at $32 per month) and then, one year later, swap that iPhone for the next one. The iPhones Apple is now selling online are likely among the first batch of phones it collected through that program.

Companies such as Gazelle have long bought people’s old smartphones but, in the early days, those phones were typically several years old, which meant companies often shipped them to emerging markets where they were either resold or scrapped for parts. One-year-old phones, on the other hand, still retain a great deal of their value, which is why Apple got into the game itself. In fact, based on IDC’s estimates, Apple is adding significant additional dollars of per-device profit for every phone it first ships out as part of the upgrade program and then reclaims and resells a year later. All the while, it’s also increasing the number of iOS users and bolstering services revenues as a result.

So, for example, right now you can buy a 16GB iPhone 6S for $449, $100 less than the same new model on (Apple cleverly doesn’t offer a new version of the 6S on its site with the same memory configuration, but a 32GB version of the 6S runs $649 on Similarly, a refurbished 64GB 6S Plus sells for $589, which is $750 new on

The result: A buyer who is interested in buying an iPhone now has a wider range of options available to them. The entry-level price for what was Apple’s top-of-the-line phone a little more than a year ago now starts at $449 instead of at $549. Not exactly cheap, but certainly more attainable for somebody who is able to pay the entire cost up front. At some point, I would expect Apple to start selling refurbished versions of the iPhone SE, which has a starting price of $399 new. We could expect prices in the $299 range or lower.

Most companies that sell refurbished phones closely inspect those phones before reselling, offering what amounts to a certified pre-owned checklist at a used car dealer. One of the advantages of buying refurbished from Apple, however, is they not only certifies the phones but they also install a brand new battery and outer shell. The new battery piece is huge, as that’s clearly one of the areas of most concern when buying a used device. And by including the new battery (which costs Apple very little), the company ensures the buyer has a good experience for the life of the product.

Who Buys Used?

Techies might not find the idea of buying a used device appealing (they’re likely the ones signing up for the annual refresh and creating the supply of one-year-old phones) but a growing percentage of regular consumers clearly see the value. In a recent IDC survey of US smartphone users, 26% said they were “somewhat likely” to buy a well-maintained 1-year old phone if the price were lower; another 14% said they were “highly likely” to do so. Among current iPhone owners specifically, those two percentages were 25% and 9%.

While there’s clearly a market for refurbished iPhones here in the US, the larger play for Apple long-term is its ability to move refurbished iPhones into markets outside of the US. For years, pundits have wondered when Apple would ship an inexpensive iPhone geared toward emerging markets. It seems increasingly clear Apple’s answer is to sell refurbished iPhones instead.

It’s a smart plan that will likely work quite well for Apple once it figures out two key issues: Which countries’ consumers are amenable to used products (not all are) and which countries’ regulations will allow refurbs to flow in (not all will). Once Apple sorts these issues out, I expect we will start to see Apple itself promoting refurbished products in more countries at more prices.

At IDC we’re now closely monitoring the used smartphone market as we firmly believe growth here could have a significant impact on shipments of new phones in the future. Apple won’t be immune to the potential negative impact of this secondary market. But, by creating its own virtuous cycle through its upgrade plans and refurbished offerings, it makes more money now and better controls its market position down the road.

The Mainstreaming of the Mac

There’s been lots of talk since Apple’s event last week about the reception to the new MacBook Pros, especially among the Apple commentariat. It’s fair to say the backlash against these new devices is stronger than for any MacBook announcement I can remember and yet it’s mostly coming from two particular sets of people – those who use heavy-duty creative applications such as Photoshop and those who develop for Apple platforms. This is easily Apple’s most vocal audience and so such a response must be at least a little disheartening. But it’s also worth remembering that Apple – and even the Mac in isolation – has long since gone mainstream and is bigger than these groups. Apple’s challenge now isn’t serving this hardcore base but pleasing the much larger mainstream Mac user base without alienating the power users.

Apple’s increasingly diverse base

I wrote a post a while back about the counterintuitive liability Apple has in its growing customer base. On the one hand, this customer base is a huge asset, especially given the upgrade cycles for devices like the iPhone and the ability to sell services to a captive group of users. But on the other hand, the increasing diversity of this base can also be a liability, because Apple now has to please many groups in a much less homogeneous base than in the past. The problem is the public image of Apple among many in the media and beyond continues to be of a company that serves mostly creative professionals. This perception has led to a lot of misguided commentary over the past week, both about the damage Microsoft’s Surface Studio could do to Apple’s Mac base and about the perceived shortcomings of the new MacBook Pro line.

Apple’s Mac base today

The reality is that Apple’s installed base of Macs today is likely around 90 million. That’s up enormously over the last fifteen years or so – it was around 25 million in the early 2000s. As that base has grown, it’s diversified considerably. Just visit any college campus to see row on row of MacBooks in lecture rooms and study halls. These aren’t creative professionals and they’re not even using their MacBooks for particularly resource-intensive tasks. But, of course, there are still creative professionals and Apple developers who use Macs for work. So it’s worth thinking about what percentage of the overall base these users might represent.

Here are some data points:

  • In 2013, Adobe estimated it had an installed base of around 12.8 million users of its Creative Suite software, with another 250,000 on Creative Cloud. Around 40% of this revenue came from what Adobe described as creative professionals, with another 25% coming from other creative people in businesses, 10% from creative people using it at home, and 25% from education
  • Adobe currently has around eight million Creative Cloud subscribers (this is how Adobe now sells its creative suite, including Photoshop, Illustrator, Premiere, and so on)
  • At WWDC this year, Tim Cook announced Apple had 13 million registered developers

If we put these numbers together, we get a picture of 8-13 million users of Adobe’s creative products and another 13 million or so Apple developers. Of course, of those Adobe users, a good chunk will be using Windows versions rather than Mac versions. At the absolute outside, though, it gives, at most, around 25 million total users in the two buckets that have been most vocal about the MacBook Pro changes, out of a total base of around 90 million, or around 28%. Realistically, that number is probably quite a bit smaller, perhaps around 15-20% of the total. Of these, not all will share the concerns of those who have been so outspoken in the past week. To look at it another way, Apple sold 18.5 million Macs in the past year, which might end up being roughly the same as the combined number of creative professionals and developers in the base.

In the end, the picture that emerges is of a base of Macs with the kinds of users that have been expressing concerns or frustration with the changes in the minority. The vast majority of the user base is in other categories, principally general purpose consumer and business users. How does the rest of the base feel about the new MacBooks? Well, of course, that base is much less vocal and less visible – the general purpose Mac user tends not to blog or host podcasts about Apple. They’re much more likely to quietly keep using the products they have and occasionally upgrade to something new. The best place to look for their feedback is sales numbers for the Mac. Those have been down a little lately as the existing Macs have been getting a little long in the tooth and those in the know have been waiting for upgraded machines.

However, Phil Schiller said this week online orders for the new MacBooks were higher than they’ve ever been for a new product before, suggesting that some of this pent-up demand is being released now. Mainstream users – and likely quite a few from among the professional class of MacBook users too – are buying this new product despite the misgivings some power users have. We won’t know until at least three months from now – and probably longer – the actual numbers on how these MacBook Pros are selling. But my guess is those sales numbers will suggest the mainstream base cares a lot less about some of the subjects of the criticism from the past week and a lot more about a decent bunch of spec upgrades, thinner and lighter hardware, and some interesting new features.

Keeping the pro base happy

Of course, Apple can’t simply ignore the professional base – though these users may be a minority among the overall set of Mac customers, they are an important segment an,d as we’ve already seen, a vocal one. Pleasing them is important in its own right but also as a way to influence broader perceptions of the Mac and Apple as a company. Apple likely needs to do more here to mollify this base. For starters, it needs to update the desktop Macs, especially the Mac Pro, quickly. The current version of the Mac Pro suffers from being less upgradeable than its predecessor. With that being the case, it requires hardware refreshes more – not less – frequently. It might also be a reasonable concession to the complaints from this base to make it more upgradeable. I suspect Apple will have to think hard about how to please those who want a portable yet ultra-powerful machine, which is really the even narrower segment that’s been criticizing the new MacBooks. The portability/power tradeoff it’s made in the new machines seems to be fine for the mainstream, but that’s the one thing that seems to be creating the most problems for the hardcore base and that’s worth addressing.

Touchscreen or No Touchscreen, That is the Question!

A lot has already been written about Apple’s Touch Bar for the MacBook Pro and how Apple should have just gone all in and actually added a touchscreen. I hinted on the day of the event that the Touch Bar could actually end up being more impactful than a touch screen and I would like to explain why.

Windows Touch Screens Were a Response to Mobile

I think it is important to look at why we have touch screens in the Windows camp.

Touch screens on Windows were not the result of a platform need. When we started to see hybrid devices running Windows, we were still on Windows 8, which was not optimized for touch. Nor were touch screens the result of an innovation aimed at changing the way we worked and interacted with content.

We got touch screens because Windows as a platform was trying to catch up to mobile.

With very little opportunity for growth in smartphones, and iPad at the high-end and cheap Android tablets at the low-end impacting PC sales, Windows PC makers wanted to fight back by adding the one function the world seemed never to get enough of. By adding touch to PCs, vendors were hoping to shift the downward trend in PC sales while decelerating tablet growth.

Then there was Surface. Microsoft started Surface because what vendors were releasing at the time was failing to compete with tablets. Consumers were not interested in buying a new PC and enterprises were still not sure they wanted to invest in the premium that touch was bringing to the new machines. Surely productivity did not need touch!

Not just about the hardware

Even Surface did not hit a home run the first time around. While it was the best hardware Windows had to offer at the time, the first iteration of Surface running Windows 8 was a less than optimal experience when using touch. The obsession of competing with the iPad was also giving way to confused products like Surface RT.

Fast forward to today and you have Surface Pro 4 running on Windows 10, offering a full computing experience in a versatile form factor with an OS that runs well with using both touch and keyboard.

Looking at hardware alone, however, is not enough to understand how far a device can go when it comes to bridging PCs and tablets. Apps have been key in tablets. So much so that the market has been clearly split in two: a high-end that is dominated by iPad, where there are over one million dedicated apps, and a low-end market where Android tablets reign supreme mainly as content consumption screens.

Windows based 2-in-1s, Surface included, suffer from the lack of touch-first apps that would help move the needle in adoption and, most of all, with engagement and loyalty. It is for this reason that seeing Microsoft invest in first party apps is so refreshing. Microsoft is delivering value and hopefully showing the potential to developers even with both apps and new devices such as the Surface Dial. In an interview with Business Insiders, VP of Microsoft Devices, Panos Panay said something I could not agree more with: “The entire ecosystem benefits when we create new categories and experiences that bring together the best of hardware and software.” 

Meanwhile, across the fence, the Mac OS store has not captured developers in the same way the iOS Store has. The prospect of being able to reach hundreds of millions vs. tens of millions of users has kept a lot of developers focusing on iPhone and iPad.

Adding touch support for macOS Sierra might have left users not much better off than they were before. I assume developing for the Touch Bar is much easier than designing a brand new app for Sierra optimized for touch, which ultimately would result in a better experience for the user.

The “I need a keyboard” argument

Clearly, Apple did not just do the Touch Bar because it was easier to develop for. Apple continues to maintain that vertical touch is not the right approach. Many disagree because the extensive use of touch is getting us more and more often to reach out to touch our screens. Yet, when we touch our screens, we generally want to scroll or select. We really do not want to do complex things which begs the question, why can’t we do it on the trackpad we have on our keyboard? We can discuss this point till the cows come home and we will find pros and cons on both sides.

So let’s look at this point a little differently. There are two main reasons why someone buys a MacBook Pro today: OS and the keyboard. Rightly or wrongly, many people still think iOS is not a “full OS” – another point we can discuss till the cows come home. But the keyboard is key.

If the keyboard is so important for these users, it seems fitting Apple focused on making that experience better. In a recent interview for CNET, Jony Ive said:

“Our starting point, from the design team’s point of view, was recognizing the value with both input methodologies. But also there are so many inputs from a traditional keyboard that are buried a couple of layers in…So our point of departure was to see if there was a way of designing a new input that really could be the best of both of those different worlds. To be able to have something that was contextually specific and adaptable, and also something that was mechanical and fixed, because there’s truly value in also having a predictable and complete set of fixed input mechanisms.”

Taking touch and contextualizing it to the keyboard to make gestures, steps, and functions more natural, immediate,and precise makes a lot of sense to me. As often with Apple, you get what you asked for but not in the form you thought you wanted it.

What Does This Mean for the Future?

For Apple, it means it is serving two different audiences that think of computing in different ways. Apple will do so for as long as it will take for MacBook users to be convinced the iPad Pro and iOS 10 represent the next computing platform.

For Microsoft, it is about focusing on the larger and longer term shift that will see Mixed Reality play a big role in the way we interact with devices, the way we do business, and the way we learn. Microsoft is making sure it is shaping its own path rather than finding itself blindsided and left to scramble as it did with mobile.